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PwC: Fintech platforms using AI, IoT best positioned to benefit from COVID-19 pandemic

PwC: Fintech platforms using AI, IoT best positioned to benefit from COVID-19 pandemic
May 08
15:47 2020

Financial technology platforms and SME-lending platforms that have embraced the use of advanced technological tools are in a better position to benefit from the post-COVID-19 effect.

This is according to a report published by PricewaterhouseCoopers Nigeria (PwC) on the changing competitive landscape of the Fintech and banking sector in Nigeria.

Quoting Finch Capital, PwC said: “There has been a significant decline in corporate VC-led (venture capital-led) investments (global deals by corporate VCs weakened significantly by about 20% in Q1 2020)”.

“In Q1 2020, global Fintech funding declined to about $6 billion, this is because COVID-19 uncertainties forced investors to divest from different asset classes to strengthen their cash positions.

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“Globally, consumer, SME-lending platforms and FinTech platforms that adopt artificial intelligence (AI), blockchain, internet of things (IoT), big data and open banking are the best positioned to benefit from the effect of the pandemic.

“On the other hand, traditional banks with a weak digital presence, in addition to wealth management and foreign exchange-focused FinTechs will experience significant pressure due to de-risking by clients, reduced transaction activity, as well as lower expected activity post-pandemic.”

PwC projects that early-stage firms would be affected the most because they would have to compete with larger FinTech firms and traditional banks.

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“The payment and digital lending segments are perhaps, the most vulnerable, particularly because the majority of Nigeria’s FinTech companies operate in both segments,” the report read.

The report also estimated global funding for FinTech companies to have declined to $6 billion by the end of the first quarter of 2020 because the pandemic forced investors to divest from different asset classes to strengthen their cash positions.

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