Looking beyond COVID-19: what could be the power play strategy for fintech players?

From moving towards self-reliance through digitalisation to technological innovation, fintech players can create new opportunities during the COVID-19 lockdown by leveraging unique assets and developing skills.
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The coronavirus pandemic sweeping across the world has drastically affected human life and economies everywhere. Industries across board are reeling in its wake, some are surviving through the sheer force of their size and resistance, while others are trying to innovate, evolve, and align themselves to new realities. The fintech industry too is grappling with the economic consequences of extended countrywide lockdown.

But within every crisis hides an opportunity – fintech players can also create new opportunities by leveraging unique assets and developing skills. The tone for growth has been set by Prime Minister Narendra Modi in his address to the nation.

Two key takeaways applicable to fintech, which will be the power play strategy in near future are – self-reliance and leapfrogging (not incremental change).

Adapting to the new normal

This crisis has disrupted all business models, and hence volumes and revenues are likely to remain low. There will also be some new hurdles going forward.

For example, this crisis will induce some banks and NBFCs to reduce dependence on suppliers (fintech players), and will likely create their own technology and data infrastructure. Businesses that are partially digital or suppliers to partially digital businesses will suffer.

The whole world is shifting towards a new reality and adapting the new normal. People have become aware about the importance and adoption of digital tools, which are continuing to provide important services through the recent disruptions.

With the practice of social distancing and zero touch policy, digital payments and transactions have also recorded remarkable growth. This is the time for everyone to re-think, re-strategise, and diversify.

Fintechs now need to create new products that are more secure against macro shocks. Most entrepreneurs in digital businesses are now aware that technologically advanced banks and services will play a vital role in the ultimate recovery of the economy.

Self-reliance through digitalisation

Fintech players need to move towards self-reliance through digitalisation and through data ownership, and need to leapfrog ahead through innovation. Lending-based fintech businesses need to go beyond digitalisation of KYC and underwriting and move towards seamless collections.

They must ensure that all the collection processes and systems are automated, making sure that money can be collected through digital channels (direct bank transfers, e-wallet, etc). 

Data ownership solution

For the fintech industry, the challenge of establishing data ownership can be overcome through technical and legal trials. Data ownership means fintech companies need to generate more data that is exclusive to them. This data can be generated as part of the users’ journey through specific activities like gamification, psychometric testing, internal performance, chatbot data, app usage, etc.

This data can be used for making decisions, ultimately giving them an edge over competitors. More data means more knowledge about users and better chances of building accurate decision models using AI/ML algorithms.

Innovative technologies

Technological innovation is going to be an important aspect that will build the fintech sector. Merely digitising the existing practices and processes will not work as a game changer for the sector. New things and new ways need to be created. As an example, using a new AI-based technique to build a credit risk model for loan underwriting will not be sufficient.

New ways and new data for underwriting needs to be created. The industry players need to use off-beat techniques like psychometric assessment to determine intention, use of story-based application forms to determine loan need/purpose, use of gamification to improve payment behaviour for innovative processes and solutions.


The fintech industry must make cohesive and combined efforts to provide the entrepreneurs with a robust foundation and access to financial inclusion, so that they have a chance to pull through and grow post these troubled times.

Edited by Megha Reddy

(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)