This weekend, the fintech landscape got its first assessment. Now that all continents are affected by the COVID-19 epidemic, the first measures of the increase in the use of digital financial services are undeniable. According to a study by deVere Group, fintech applications have seen their usage increase by 72% in just one week. More than ever, the startups behind this small revolution are on the rise. Online banks and neo-banks in particular are seeing their subscriptions rise sharply.
“The world has changed in the last few weeks,” exclaimed James Green, deVere’s European Group Director. “The measures we are taking to help fight the coronavirus are affecting the way we interact, live, work and take care of our finances.”
Two factors do indeed seem to explain the massive rebound in the popularity of these new services in the financial technology industry. On the one hand, confined people want to keep up with digital services that no longer require travel. On the other hand, fun features, such as those advocated by neo-banks like Revolut or N26, are a good way to review the way people manage their money.
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Revolut and N26 two strong competitors on the fintech market
Revolut was founded in 2014, and has been gradually deployed in various European markets including France (one million customers), but also across the Atlantic with a test phase for 30,000 users at present. Following the example of N26 – its competitor – the plan is to attract 100 million customers by 2025, thanks to increasingly extensive international coverage and a growingly comprehensive offer. Traditional banks are in the sights, as well as their digital versions – generally called “online banks”, taking advantage of the assets and products of their parent company.
For its part, Revolut can take advantage of its young and native image in the rise of fintech. Proof of this is that even Société Générale admitted that “in terms of the number of clients, they are really starting to weigh in.” As with N26, Revolut has deployed its offer in three different bank card formulas.
A decisive period for fintech
A few days ago, Revolut officially entered the market in the United States, in the midst of a crisis for traditional banks that have seen their stock market listings plummet. Its new start could be helped by the health measures gradually being taken by metropolises such as New York, where more and more people are in a situation of confinement.
Despite low morale among individuals, and the possibility of a severe recession in the economy, digital financial services continue to see increases in usage. Some applications are reaching new heights: Glint Pay’s gold buying program, for example, has seen a colossal 718% increase in traffic.
“A new era has already begun, with digitization and new technologies driving change,” said James Green. For the moment, the fintech landscape is one of those few areas to benefit from the current situation. The sector shares this increase in traffic and popularity with video conferencing platforms such as Zoom, Google Hangouts, Skype and FaceTime for teleworking, as well as streaming platforms such as Netflix, YouTube, Amazon Prime Video and Disney Plus for home entertainment.
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