The Russian Fintech sector is not ready for the coronavirus outbreak

The Fintech sector in Russia is not ready for the coronavirus outbreak in the country, according to several interviewed experts in the banking sector.

Born2Invest is an independent business news mobile application that provides exclusive, reliable and interesting happenings in the field of economy, business, finance, and fintech. With our application, you can learn the main and the latest news in the world and read articles to be aware of all events, expert opinions, and comments.

Russian people are not used to online shopping

At the end of January 2019, Rospotrebnadzor (Federal Service for Supervision of Consumer Rights Protection and Human Welfare) recommended Russian citizens to limit welcome handshakes, kisses, and hugs during the active circulation of the new coronavirus in the world. The Office drew attention to the danger of pneumonia due to COVID-19 infection.

However, in the event of an epidemic and related restrictions on contact between people, difficulties in visiting hospitals, shops, and transport, existing Russian online services will not be able to help. Electronic registration in clinics is not always available, the cashless payment system is not established, and delivery services are developed only in large cities, according to financial analysts.

Yegor Klopenko, venture capitalist, founder of iTLEADERS said: “The Russian fintech sector is not ready for the new coronavirus and is unlikely to start preparing. Even if the pandemic develops further, I do not see any options with the increasing load on the existing Russian services more than the statistical 10%. Again, it concerns only some separate segments, and on average in such a situation there will be a decrease in economic activity and, as a consequence, a decrease in the audience and the majority of fintech projects.”

However, according to Pavel Myasoyedov, director and partner of “Intellectual Reserve”:  “there are drivers for the growth of the fintech industry and innovation in Russia.”

Fintech services are popular in large cities

Pavel Myasoyedov, director and partner of the company “Intellectual Reserve” commented: “In Russia, delivery services are developing in large cities, they have not yet reached small settlements. People prefer to order food from restaurants and cafes, and fresh fruits and vegetables to choose for themselves. Having received expired goods once, the client is ready to refuse delivery in favor of an independent visit. In some cities electronic records in clinics were introduced a few years ago, but are not always available – sometimes there is no equipment, or there are not enough narrow specialists.”

“In China, the situation is different,” added Measoedov, “delivery services in the Celestial Empire have been working for many years and not only in megacities, and the population is used to the cashless payment system.”

The Russian e-commerce market is not ready yet

An outbreak of pneumonia in December 2019 in Chinese Wuhan brought popularity to the already popular local messenger, which also has an internal payment system – WeChat. The service, along with the Weibo platform and news aggregators ByteDance Toutiao and Tencent News, launched an application with messages about new virus outbreaks and published medical advice.

There are no analogs of such products in Russia, but only the leading banks of the country can create them, said Gennady Nikolaev, an expert of the Academy of Finance and Investment Management. He called the Russian e-commerce market too immature in contrast to China, with a volume of $740 billion, and the U.S. – $561 billion. In Russia, the analyst estimated that it does not exceed $31 billion.

“Domestic banks are the main innovators in this area, actively developing B2B and all sorts of marketplaces in cooperation with the largest IT companies in the country,” explained Nikolaev. “Unlike startup enthusiasts, financial organizations have enormous resources, both human and monetary. That is why the fintech sector in Russia will develop thanks to major players and will be more focused on the banking infrastructure,” said the expert.

“In recent years, financial institutions are simplifying registration for users on their sites as much as possible, offering cashback – the return of some spent money on the card and other formats of the loyalty system. However, the creation of lifestyle services turns out to be rather expensive and requires considerable time expenses,” said the head of the mobile applications development department of Tinkoff Bank Anna Mikhina.

Coronavirus and the demand for fintech services in Russia

“In the event of an epidemic, technology will become a necessity in Russia,” said Viktor Zuev, a virologist at the Gamaleya Institute. He stressed that the importance of following personal hygiene rules will increase as the epidemic will develop,” said Zuev.

He continued: “So far, Russia has been doing well and in regions of the world, where the coronavirus blazes, of course, it is worth reducing contacts between people and to increase the use of electronic technologies. It is quite obvious.”

Gennady Nikolaev believes that coronavirus will not increase the demand for fintech applications in Russia. The exception may be a full-fledged quarantine, in which entrepreneurs will have a choice: either to quickly implement online products or lose profits, he said. In turn, leading Forex Optimum analyst Ivan Kapustyansky doubts the popularity of services in case of mass outbreaks of infection.

__

(Featured image by geralt via Pixabay)

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.

First published in Рамблер, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

Although we made reasonable efforts to provide accurate translations, some parts may be incorrect. Born2Invest assumes no responsibility for errors, omissions or ambiguities in the translations provided on this website. Any person or entity relying on translated content does so at their own risk. Born2Invest is not responsible for losses caused by such reliance on the accuracy or reliability of translated information. If you wish to report an error or inaccuracy in the translation, we encourage you to contact us.