Financial technology was hit hard during the COVID-19 crisis, but then again, it doesn’t make fintech any different than all the other industries in 2020. No one can say what comes next and uncertainty is definitely not a perfect environment for any type of business endeavor. However, there is a light at the end of the tunnel.
The coronavirus pandemic actually helped fintech become a more favorable banking solution in 2020. A report reveals that Japan, the USA, UK, Germany, and many other countries see an increase in fintech app usage since the outbreak of COVID-19.
What makes fintech so resilient? How does the whole situation reflect on fintech investors? Keep reading if you want to learn the best tips and benefits of fintech investing during the economic downfall.
5 reasons to invest in fintech
Why would you invest in fintech during the coronavirus crisis? It’s a key question every entrepreneur should ask themselves, but we can give you no less than five reasons to choose fintech before other industries.
Online transactions are booming
If there is one thing we can say for sure, it is that COVID-19 gave the extra push to online retail. During the first half of 2020, US consumers spent over 30% more on online purchases than in the same period last year.
This is obviously a huge opportunity for fintech startups to enhance services and enables faster, more convenient, and safer transactions. Besides that, financial technologies are accessible to everyone with the Internet connection, which is a decisive advantage for users who are stuck in the quarantine.
Fintech supplements online commerce
This benefit goes hand in hand with the first one, but it deserves its own position on the list. Fintech products can seriously augment online commerce and improve user experience, which is the key to success in the world struck by COVID-19.
If you can make a fintech product that secures and simplifies online shopping, you can count on a massive return on investment.
Fintech is more affordable than ever
The development of fintech products requires a whole set of unique skills and it often makes the projects in this field way too expensive. But fintech is now more affordable than ever due to a highly specific reason.
Namely, almost every government in the world has adopted a financial plan to simplify administration and support new startups. This basically means that your initial costs can be much lower than usual, so you better take advantage of it.
Lower labor costs
Speaking of lower costs, you should know that lots of fintech experts have become available since the outbreak of the pandemic. Many businesses have failed already and now all sorts of developers and fintech specialists are searching for fresh business opportunities.
The competition among fintech professionals is reaching the peak these days, so you can cut labor costs while employing the most skilled individuals for your project. There’s a massive talent pool out there and you only need to make your pick.
The competition is weaker
The coronavirus crisis ruined many promising ideas, but at least it makes your competition weaker. Rest assured there aren’t too many entrepreneurs and venture capitalists willing to invest in larger projects these days, but it gives you the chance to step in and conquer the market in need of fintech products.
We are not saying that there is no competition at all, but the truth is that you won’t have to fight with as many rivals as you usually would.
Key Tips for Successful Fintech Investing
The advantages of fintech investing look very promising, but how do you choose a project and prepare your investment? We can give you three practical tips:
Research the market
What is the purpose of your fintech product? Does it solve a practical problem for users struck by the crisis or lockdown? You need to answer these and many other market-related questions before investing in the next project.
Keep in mind that the point of fintech investing in 2020 is to craft a trendy app that eliminates a common pain point among users. You can also check out competitors who are struggling to stay alive and launch an improved version of the same product.
Many options are available, but you have to research the market conditions before making a move.
Pinpoint target audiences undisturbed by the crisis
A lot of consumers are struggling to make ends meet during the coronavirus pandemic, but there are still enough clients who can afford a brand new fintech app. Your job is to analyze potential customers and identify users who are interested in fintech applications and able to pay for it.
Gather a team of skilled developers and marketers
Finally, it takes a team of skilled professionals to launch a successful fintech project. We encourage you to hire expert developers and marketing specialists who are able to design a new product and promote it through numerous communication platforms.
The best way to do it is through your network of professional acquaintances, but there is also the option of hiring professionals via freelancing platforms such as Upwork, Toptal, or even LinkedIn ProFinder.
The bottom line
2020 is not a perfect year for investors, but fintech may as well be one of the rare surefire options. In this post, we discussed the benefits of fintech investing and gave you the most important tips for doing so during the economic downfall. Are you ready to make some serious fintech investments?
DISCLAIMER: This article was written by a third party contributor and does not reflect the opinion of Born2Invest, its management, staff or its associates. Please review our disclaimer for more information.
This article may include forward-looking statements. These forward-looking statements generally are identified by the words “believe,” “project,” “estimate,” “become,” “plan,” “will,” and similar expressions. These forward-looking statements involve known and unknown risks as well as uncertainties, including those discussed in the following cautionary statements and elsewhere in this article and on this site. Although the Company may believe that its expectations are based on reasonable assumptions, the actual results that the Company may achieve may differ materially from any forward-looking statements, which reflect the opinions of the management of the Company only as of the date hereof. Additionally, please make sure to read these important disclosures.
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