2020 has been a year of unprecedented disruption across all sectors of business and human activity generally. The financial service sector has not been an exception. Banks have closed, at least temporarily, and many other services that users have come to rely on have had hiccups or slowdowns of varying degrees. For example, many banks were forced to close several branches, which were the primary points of contact for a large proportion of customers.
Amid all the disruption, technology has been the major bulwark for the financial services industry, just as with other sectors of society. Fintech startups have been able to fill the gap left by traditional banking institutions with their solutions that require minimal human contact, thus complying with social distancing regulations while maintaining or even increasing the convenience level for customers. As things return to normal, it is likely that many customers who began using fintech services out of necessity will continue to use them by choice. As a result, there’s a massive opportunity in the sector now for investors and entrepreneurs. The following are some of the most promising verticals.
Digital Payment Services
In a time when e-meetings, e-schooling, e-parties, and a variety of other traditionally-physical activities have been pivoted onto the internet, it’s no surprise that e-commerce has gotten a massive boost recently, especially in light of its previous steady rise. The spike in e-commerce transactions has been drastic in many places, with Italy seeing an increase of 81%, according to Mckinsey & Company, and according to a new report by Digital Commerce 360, the amount spent by customers with U.S. retailers grew 30% ($60.42 billion) in the first six months of this year compared to the same period last year. Payment processing companies have grown in tandem with the e-commerce surge, and there’s still room for more growth as normal activities resume and customers begin to use digital payment services to pay for more things that they would ordinarily have used cash or bank transfers for.