It has been commented on numerous occasions that certain markets have benefitted from the pandemic. In particular, it has been noted that the pandemic served to accelerate changes that were already well underway. As more measures were adopted to contain the spread of the virus, this had the knock-on effect of bringing about transformations that would have otherwise taken years or even decades to materialise.
In our last article, we took a look at the executive summary of The Global Covid-19 Fintech Market Impact and Industry Resilience Study
by the World Economic Forum (WEF). Today, we want to go into a little more detail on the section dedicated to the direct impact of lockdown measures on the fintech economy, as well as the “relief measures” adopted by most countries around the world. Looking at both sets of indicators together, it is clear to see that the pandemic accelerated change, but it was not the prime mover. The fintech market certainly benefitted from the COVID-19 pandemic, but there is far from a direct relationship between the transformations that have occurred and the spread of the virus.
In those countries with less stringent lockdown measures, the fintech industry grew some 30% more in 2020 than in 2019, with the total value of transactions reaching $32 billion compared with $25 billion the previous year. These figures still remain small in comparison to those seen in countries with more intermediate lockdown measures, where the total value increased from $41 billion to $75 billion, an increase of 81%. And in the majority of countries, where measures were much stricter, the increase seen was proportionally less (66%) but was undeniably large in absolute terms, growing from $288 billion in 2019 to $478 billion in 2020.
Presented this way, it would be very easy to draw two erroneous conclusions from these figures. Firstly, one might conclude from the volume of transactions in 2019 that the toughest restrictions were applied by countries with a more developed fintech ecosystem. After all, previous total transaction values were $25 billion in less-strict countries, $41 billion in intermediate countries, and $288 billion in those countries with the toughest measures. However, this is not the case. It is simply that the majority of countries in the world opted for stringent measures, and therefore the total value of fintech transactions in these countries was greater.