Flip through the latest issue of Gulf Weekly.
The Covid-19 crisis has turned almost every sector on its head and will probably have long lasting impacts on the global economy as well as our personal and professional lives.
As humanity faces a crisis, unseen in most of our lifetimes, many technological sectors are seeing seismic shifts, with many seeing significant returns as they become part of our new normal such as food delivery and video conferencing applications. Meanwhile others, like personal concierge applications, are facing uncertain futures.
The financial technology sector is an interesting beast since it is the backbone of most of our daily transactions.
There is a negative impact for sure. MasterCard and Visa have cut their global revenue forecasts, as fewer people are travelling and many are being reimbursed for purchased airline tickets, depleting a significant source of revenue for these companies.
Payment processors like Stripe and PayPal have also seen a drop in activity as people are spending less of their discretionary income, choosing to save it in the face of uncertain economic futures.
Interestingly, however, while individual tech-centric companies are seeing a drop in revenue, technologies like contactless payments and blockchain data are seeing wider implementation.
Many of the banks in Bahrain have boosted transaction limits on contactless payment as social distancing becomes a necessity and people are wary of shared contact surfaces like numeric keypad terminals.
This move towards more digital touch points is a boon for traditional banks with strong brands that have been quietly adopting this technology over the last decade, but for pure FinTech firms that normally sell directly to vendors, shrinking commercial budgets are an existential threat.
Ubiquitous technology like virtual shopping and telesales are also being put to the test as more and more consumers rely on these to fulfil their basic needs. Lulu Hypermarket’s online store, for example, has seen a dramatic influx of orders, putting their platform and new delivery network to the test.
Perhaps most intriguingly, financial-specific technology like Blockchain is now seeing a wider diversity in applications as it is being used by countries like South Korea to transmit and verify medical data.
Meanwhile, many other financial-specific innovations like cryptocurrencies have tanked in the face of economic uncertainty.
While the future of what our financial transactions might look like is hard to predict, one common strand that is visible right now is the success of firms and technologies that are quickly able to adapt themselves to new use cases. And nimble and adaptive technology that reshapes itself to the human experience instead of the other way around might be one of the few positive outcomes of a pandemic-fuelled economic downturn. One can hope.
