Finance Breaking news CCAF, World Bank, WEF: Covid-19 caused uneven growth across fintech last financial news
Breaking-Finance.Com - A joint report by The Cambridge Centre for Alternative Finance (CCAF), the World Bank Group and the World Economic Forum, has found that while 12 out of 13 fintech sectors reported year-on-year growth during the first half of 2020, significant discrepancies between sectors and regions remain.
Breaking-Finance.Com - A joint report by The Cambridge Centre for Alternative Finance (CCAF), the World Bank Group and the World Economic Forum, has found that while 12 out of 13 fintech sectors reported year-on-year growth during the first half of 2020, significant discrepancies between sectors and regions remain. While firms reported growth in transaction numbers and volumes of 13% and 11% respectively, the report which surveyed 1,385 fintechs across 169 countries also warns that growth wasn’t uniform across fintech, as firms face headwinds in operations, fundraising, and regulatory concerns in light of Covid-19. Digital banking, digital identity and regtech sectors showed a more modest growth increase of 10% compared to their counterparts in digital payments, digital savings, wealthtech and digital asset exchanges which saw transaction volumes grow in excess of 20%. Procyclical digital lending fintechs saw an average 8% decrease in transaction volumes. "Covid-19 is accelerating change in how people interact with financial services, which has led to unprecedented demand from developing countries to progress their transition to secure and inclusive digital finance,” comments James Duddridge MP, the UK’s Minister for Africa at the Foreign, Commonwealth & Development Office (FCDO). “Whilst it is encouraging to see the growth reported by FinTechs in the study, there are also cautionary indicators that some firms are suffering a deterioration in their financial position and are concerned over their ability to raise capital in the future,” adds Duddridge. 40% of fintechs surveyed reported that the pandemic had negatively impact on their firm’s valuation and 34% flagged that the outlook for future fundraising would be negatively impacted.
“Fintech has shown its potential to close gaps in the delivery of financial services to households and firms in emerging markets and developing economies,” Freund comments.
Fintechs based in Emerging Markets or Developing Economies (EMDEs) saw higher average growth in transaction numbers and volumes (15% and 12% respectively) than those in Advanced Economies (AEs), but were also much more likely to report an urgent need for regulatory support than fintechs within AEs.
Freud furthers: “this survey shows how the fintech industry is adapting to the pandemic and offers insights for regulators and policymakers seeking to promote innovation and reap the benefits of fintech, while managing risks to consumers, investors, financial stability, and integrity.”
Bryan Zhang, co-founder and executive director of the Cambridge Centre for Alternative Finance comments: “this study reveals a global FinTech industry that has been largely resilient in spite of COVID-19. Nonetheless, its growth must be interpreted with nuance and in the context of unevenness, and the opportunities for the industry should be juxtaposed with the challenges it faces.”
“It’s clear COVID-19 has disrupted the global economy with lasting implications for corporates and consumers,” says Matthew Blake, head of financial and monetary systems, World Economic Forum. “Despite this challenging backdrop, FinTechs have proven resilient and adaptable: contributing to pandemic relief efforts, adjusting operations and offerings to serve vulnerable market segments, like micro, small and medium-sized businesses, while posting year-over-year growth across most regions.”
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