At the Fintech South summit this year, the impact of the coronavirus pandemic on the financial ecosystem was the overarching topic. Rightfully so, as the event itself was impacted. The 2,500 summit attendees, typically housed in Atlanta’s Mercedes Benz Stadium, instead logged on to a virtual conference nearly seven months after the original date.
However, necessity breeds innovation. The newly virtual event, hosted by the Technology Association of Georgia (TAG), brought together senior fintech leaders from Georgia, as well as from the global fintech ecosystem, including stakeholders for the payments industry, banking, wealth management, insurance, retail and commerce, government and regulatory, venture capital, startup founders, technology service providers, and nonprofits.
One thing is certain, most attendees agreed that the coronavirus pandemic was an unexpected catalyst for digital innovation. As Andrew Lipsman, Principal Analyst, Retail & E-Commerce for eMarketer said, “We’ve fast forwarded three years in three months’ time.”
In fact, many of the presentations focused on this increase in digital innovation. According to presenter Elena Whisler, Senior VP at the Clearinghouse, a recent MasterCard study shows that 76% of respondents say the pandemic prompted them to become more digital, while 82% responded that they are changing how they send and receive payments.
Likewise, widespread adoption of digital commerce permeated all industries. Companies that were prepared for this digital acceleration were able to immediately benefit from it, while organizations that did not have digital strategies in place were forced to quickly adapt.
According to presenter Scott McKay, VP Global Digital Commerce of Fiserv, retail clients grew by 100% year over year for their digital volume and grocery clients were up 250% year over year. In fact, there were 10 times more consumers using contactless delivery options in grocery than prior the pandemic. Similarly, we’ve seen a digital innovation boom in the government industry in response to the record unemployment rates.
Indeed, the onset of the pandemic has led many consumers to toss their cyber worries out the window and embrace apps to purchase products (like Apple Pay). There has been a distinct move from card-present to card not-present transactions. According to one presentation, card not-present made up 15% of retail spend in 2019. In 2020, it increased 10 percentage points. That means a full decade’s worth of change occurred in less than 10 months.
However, many consumers are still fearful of the looming uncertainty caused by COVID-19. These trends will likely continue accelerating. As more and more consumers limit physical in-store purchases via credit cards, key payment issues like real-time payments, Know Your Customer (KYC) and Anti-Money Laundering (AML) will be pushed into the spotlight.
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