How Ukrainian fintech is in crisis and why the sphere may become one of the main growth points in Ukraine
Due to coronavirus, quarantine has been going on for almost a month, and the LeoGaming team cannot remember a single working day that would seem easy to it. And all because the mode of operation of the sphere of online payments, e-commerce and all payment solutions tied to online, is now quite worthy of the epithet “turbo mode”. Many experts now prefer to make predictions about the extent of “everything is very bad” that awaits us due to the global recession. I would like to tell you why financial technologies in the conditions of crisis will suffer less than other spheres and why their communication capabilities will become one of the main growth points for our economy.
The second wave of coverage of non-banking customers
The opinion about the low level of financial literacy of Ukrainians can be often heard. This thesis sounds from year to year and is not really changed. And this is the problem ─ the market is changing, but such statements, for some reason, stuck in the heads. First of all, by financial literacy it is often meant the ability to use online tools rather than the level of knowledge in the field of finance, personal savings and ability to manage them.
Well, so be it. If we study the number of customers of online banking and mobile applications of Ukrainian banks announced in the press, only Privat24 users will constitute 10 million. If we add the rest of the top banks in digital (taking into account that one client can use the systems of several banks), than the figures will not be in favor of skeptics: 60 million issued cards with almost 25 million Internet users. Yes, 37% of Ukrainians do not have bank cards at all, so the indicators of our financial inclusion are lower than in Sweden or the UK. However, Ukrainians cannot be called financially illiterate.
Namely the percentage mentioned above can be attributed to the segment of the so-called “non-banking” customers. And both quarantine and coronavirus served as an occasion to reach out such people in terms of the advantages of fintech tools over trips to departments. All banks are now witnessing an increase in the use of applications and desktop clients, but new projects, that were supposed to be launched this year, will face great difficulties in reaching new customers.
Everything will be online. Now for sure
If earlier online payments were an obvious decision in favor of moving forward and following your active audience, then quarantine literally forced people to master non-cash payments, even the most ardent skeptics and paranoiacs. When cash poses a direct threat to human health, fintech services become a relevant present and promising future for a much wider audience.
Therefore, all issues related to payments do not just have to be online. We are faced with a difficult challenge: how to save and increase functionality while maintaining the simplicity of user interfaces? This is the second challenge faced by the fintech industry and to which it must duly respond.
The lack of financial resources for the implementation and development of new and existing projects will actively interfere with everything described above. Many cool projects are captured by two points:
1) Crisis ─ time to reduce investment
2) Crisis ─ time of opportunities
Therefore, those whose main incomes will not be affected by the crisis will be able to survive and succeed in the market. They will be able to accumulate funds to strengthen their own digitalization.
This crisis will pass — like all the others in our economic history. However, the “coronacrisis” is distinguished precisely by changes in the habits of millions of Ukrainians. Many will return to their previous way of consumption after the decline in the highest incidence of the disease, but for many people online will become the new payment reality automatically. And successful non-cash decisions will be a serious help for the economy to become more flexible. Experience has proven that flexibility is the most valuable survival skill in the modern turbulent world.