Daniel Makina, University of South Africa

In December 2019 an outbreak of a novel coronavirus was detected in Wuhan City, Hube Province of China. The World Health Organization (WHO) subsequently named the disease caused by the novel virus -COVID-19- and declared it as a pandemic on 11 March 2020 after the virus was reported to have spread in many countries across the world. In an effort to suppress the spread of the virus, economies went into lockdowns, whose effects included, among others, disruption of global supply chains and slowdown of economic activities worldwide. South Africa which went into lockdown on 26 March 2020 was not spared either, and almost all its sectors of the economy were adversely affected.

The nascent fintech industry which now has more than 12,000 start-ups worldwide and an estimated market value of $4.7 trillion according to Goldman Sachs, saw the COVID-19 pandemic as presenting both challenges and opportunities. Given that fintechs generate their revenues from volume financial transactions, the slowdown in economic activity meant loss of earnings and access to finance, especially venture capital. On the other hand, the pandemic triggered social distancing, isolation and lockdowns that became the single biggest catalyst for a digital transformation, the mainstay of fintech. As expected, COVID-19 resulted in the tremendous growth in the use of digital financial services and fintech apps. Furthermore, fintechs are coming up with new innovations and leveraging existing ones to deal with the pandemic crisis. The adage that adversity inspires creativity instantly became reality. Since fintech platforms already exist in online formats, the fintech industry acquired a unique competitive advantage in a world that had been forced to go online as social distancing accelerated the use of online mobile channels in managing finances.

According to a recent report by Deloitte -Beyond COVID-19: New Opportunities for Fintech Companies, the fintech industry is reported to be well positioned to respond to the crisis by virtue its ability to:

  • collect and analyse Big Data;
  • use cloud computing rather than relying on legacy systems;
  • offer digital experience (virtual) suitable for social distancing;
  • partner with the broader financial services sector; and
  • collaborate with other institutions.

In the era of COVID-19 customers are demanding remote digital services. A survey by Lightico on consumer banking found that 73% of customers are doing more remote work or remote errands due to the coronavirus, and 63% are more inclined now to try a new digital app or website than before the coronavirus. Thus, data clearly informs banks that consumers are ready for and need digital solutions offered by themselves or in partnership with fintechs.

Indeed, fintechs and financial institutions are collaborating and partnering to respond to the COVID-19 pandemic worldwide. A selection of the following US-based fintechs listed in the Forbes Magazine shows that they are playing their part.

Agora Services: The fintech is assisting financial institutions during the COVID-19 pandemic by offering them a cloud-based system that enables bank customers to utilize and manage accounts in real-time without replacing their core banking system.

Appway: The fintech is offering free of charge its COVID-19 Credit Application package to financial institutions in order to facilitate their journey towards the digitalization of all processes related to the customer lifecycle.

Micronotes: The fintech has created the Micronotes COVID-19 Goodwill Program that offers clients free access for 60 days to: (1) its Micronotes system which is pre-integrated into Retail Online; (2) its the COVID-19 template interviews; and (3) its Campaign Manager that is used to launch COVID-19 interviews as well as view campaign reports.

NXTsoft: The fintech is providing a free educational webinar series, namely, “Pausing the Pandemic Panic: Ideas & Solutions for Financial Institutions in these Uncertain Times” -specifically designed for financial institutions during the COVID-19 pandemic.

In South Africa the COVID-19 pandemic is set to fast track the growth in contactless payments. Given the uncertainty as to when the pandemic will abate, payment fintechs such as DPO SA, MasterPass, Zapper, SnapScan and Yoco are bound to increase market share. For instance, after going through the adversity of retrenching staff, Yoco, a financial platform for small businesses, innovatively launched three online payment solutions -Payment Page, Gift Vouchers, and Payment Request – for merchants to sustain their cash flow during and beyond lockdown. The suite of solutions is purpose-built for small businesses so that they are able to conduct business online differently in a secure and simple manner.

One noteworthy observation by Deloitte is that the economic disruption caused by the pandemic has highlighted the importance of serving financially excluded people both in developing and developed economies. According to the World Bank, there are currently about 1.7 billion unbanked individuals, the majority of which are in developing economies. In order to shield low-income and vulnerable households from the effects of COVID-19, governments are embracing digital solutions that may foster financial inclusion in the long run. Fintechs, in partnership with financial institutions, retailers, NGOs and the government sector, are active in distributing social welfare benefits to the vulnerable population.

Going forward, the relationships that are being forged between fintechs and banks in the wake of COVID-19 is expected to be long-lasting and beneficial for both parties as the entire financial services landscape moves from physical delivery to virtual delivery. Fortuitously, banks have been given an opportunity to leverage their digital options as they heed calls to limit the spread of COVID-19 through social distancing. Mobile apps are enabling banks to efficiently operate 24/7 without requiring face-to-face interactions.  Furthermore, the pace of fintech adoption is expected to continue increasing as they enhance innovative solutions to support customers and businesses affected by the pandemic. Post-COVID-19, the fintech industry is posed to be a winner as the financial services landscape embraces digital transformation.


Deloitte (2020) “Beyond COVID-19: New opportunities for Fintech companies”, Deloitte Center for Financial Services

Lightico (2020) “Customer Survey: Impact of COVID-19 on Consumer Banking”,

Makina, D. (2019) Extending Financial Inclusion in Africa, Elsevier,

Shevlin, R. (2020) “A  List Of Fintech Firms Providing Free Technology During The Coronavirus Crisis,” Forbes, March 23, 2020, https://, accessed on April 4, 2020.