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Resilience is the key to success during COVID times

While earlier the objective of fintech’s was to differentiate themselves from other players in the market, going forward, the focus will need to shift to remapping and redesigning their product offerings to the new emerging consumer profiles coupled with the challenges of the new normal around demographics & logistic feasibility

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In these unprecedented times of pandemic crisis and economic downturn, there has been a substantial damaging impact on various sectors and fintech is no exception. In India, there has been significant growth for fintech players in the last few years thanks to focus on financial inclusion supported by policy reforms to empower the sector. However today, the sector is under immense stress owing to factors such as access to funding, inflow of working capital, workforce reduction, economic slowdown, and others.

Many non-banking financial companies are reconsidering their key priorities that require focused approach to brace the unpredictability, while also strategizing for the future. The need for able and improved strategies related to innovation, digital financing, and marketing are needed more than ever especially for smaller companies that has limited capital inflow.  However, for others it brings in hope and offers an opportunity to think big and act boldly, thus an organization’s ability to learn and adapt quickly will make a winning difference. The impact of possibly this century’s biggest economic recession calls for resilience and a sanguine attitude. Restricted mobility, uncertainty around income stability, lesser conspicuous buying from the consumers will need fintech companies  to synergise its functions be it marketing, sales, underwriting, collections and be innovative and target their audience (both investor and customer) in a meticulous & viable manner.

The world woke up to remote working and for fintech population as well it has proven to be productive. Remote working has enabled business continuity allowing all business functions to remain active while keeping the operational costs in check.  Making new sales, servicing customers, and negotiating contracts can be done virtually with fair degree of success with IT support and smart internet enabled devices. In a time where the travel, tourism, pubs and malls, garment industry are gasping for breath, business models of lending players which are not dependent on customer’s physical presence have seen seamless work and growth in effective delivery.

While earlier the objective of fintech’s was to differentiate themselves from other players in the market, going forward, the focus will need to shift to remapping and redesigning their product offerings to the new emerging consumer profiles coupled with the challenges of the new normal around demographics & logistic feasibility. This will, in effect, end up creating a new market all over again.

Another big advantage that fintech companies have is the access to new age technologies that can drive insights to support real-time decision making thus adding value to provide enhanced customer experience especially in this time of crisis. By combining knowledge and experience with the speed and agility of a fintech, there is a clear opportunity to grow. With Covid-19 changing how businesses operate, sharp business acumen coupled with collective leadership can indeed be the propeller to bolster operations as well as to minimize the impact on employee attrition.

To navigate this downturn, fintech companies would need to have robust business continuity plan one which is more risk averse.  It would look for right partnerships with other financial institutions to secure their loan liabilities through guaranteed repayments, collateral-based or collaborative lending and other core services. Moreover, being on top of regulatory frameworks and conserving cash reserves by renegotiating contracts or focusing on defensive investment would also need to be key priorities.

The perfect answer to the above may seem elusive however many in the sector are already rising to the challenge, adjusting their products and services to meet the needs of customers who are struggling through the pandemic themselves. In short, fintech companies that will show buoyancy while reconstructing the resiliency plan, nimbleness by validating and reprioritizing business assumptions and focus on robust business model will stand tall and remain steady after the pandemic gets over.

Authored by Ashish Kohli, Managing Director & CEO, Kreditech India


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