Despite the economic doom and gloom brought about by the ongoing Covid-19 pandemic, banks remain as committed as ever to seek out and possibly invest in fintech startups in an effort to grow non-interest income.
According to S&P Global Market Intelligence, large financial institutions in the Asia-Pacific took part in 44 fintech equity rounds, just two fewer than the prior year, with Japanese banks such as MUFG, Sumitomo Mitsui Financial Group and Mizuho Financial Group among the most active fintech bank investors in the region.
Mizuho Financial Group, alongside its technology partner LINE Corporation, has announced plans to increase their investments into a specialized “smartphone bank” aimed at offering a more thoughtful banking experience to users, a chance for established financial institutions to solidify their relationship with clients.
“Deeper relationships are predicated on a bank’s precise understanding of a customer’s unique needs and expectations,” according to a commentary from McKinsey & Company’s recent whitepaper on “AI-powered decision making for the bank of the future”.
“A bank can craft offers to meet emerging needs and deliver them at the right time and through the right channel. By doing so, the bank demonstrates that it understands customers’ current position and aspirations and can help them get from the former to the latter.”
Banks are not the only ones looking at technology-based solutions in the post-Covid-19 world. Small businesses as well, who have been hardest hit by the pandemic, are open to new ways of doing things. That’s based on a study by CPA Australia on small Malaysian businesses, which found that 40% of businesses interviewed had made greater use of technology over the past 12 months, focusing on e-commerce and social media channels to keep their business running.
"With many small businesses having a strong focus on innovation, e-commerce, good staff and improving business strategy, we are likely to see them recover quickly from Covid-19, especially in the second half of the year. Such a focus also sets them up for long-term growth,” observes Jimmy Lai, president of CPA Australia’s Malaysia Division.
Amid the long-term impacts of the pandemic, expect newer and more efficient services coming out from banks and companies as we look to operate in the new normal environment.