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7 minutes read

FinTech Trends 2020: The Good, the Bad, and the Ugly

By Robert Kazmi
By Robert Kazmi
7 minutes read

Due to the Covid-19 pandemic, the world is entering an economic turmoil not seen since the Great Depression. Although experts say that the current situation will not be as bad, there is still much we have to figure out. How the economy will behave in the coming years is a mystery. Governments all over the world are implementing generous aid programs to help companies and people, but uncertainty prevails. Nonetheless, we can already spot some trends taking shape.

FinTech, a sector that was performing great before Covid-19, is at the crossroads between surviving the crisis and a universe of opportunities. At Koombea we believe that, despite adversities, the latter will prevail. In this post we analyze some of the most important FinTech trends that investors and managers should keep on their radar if they wish to stay afloat and come out of the crisis stronger. 

The Bad

Economic Slowdown

The world’s economic slowdown has affected each and every single country and industry across the globe. Some industries have been negatively impacted while others are having an unexpected boost. In general, FinTech falls in the latter. 

Although some FinTech companies are struggling due to the economy’s overall impact, it is safe to say that the majority continue to operate at levels of performance equal to or above before the pandemic. So why do we mention the economic slowdown as something bad? Right now we are seeing the tip of the iceberg of the pandemic’s impact, but we don’t know for sure how it will evolve. Calling it a win for FinTech right now would be anticipating; there is still much to do. 

Some FinTech real estate and insurance companies seem to be having a hard time, although this seems more of a temporary issue rather than a new normal. Interestingly, other similar companies seem to be doing just fine, although they’ve had to reinvent themselves and apply stricter risk management policies. In the long term we expect these sectors’ evolution to be directly correlated to the economy’s recovery.


Like SoftBank, investors in general feel that this is not the moment to take bold risks. Although this is a challenge for FinTech startups, it is not necessarily something to be afraid of. Even though venture capital has also seen a slowdown, it will still make investments, although more selective ones, rewarding safe and innovative solutions as the preferred option. The FinTech companies that are able to meet these requirements are the ones who will be able to access funding. There is a great opportunity for FinTech in Latin America and other emerging countries. 

Useless Business Data

Many FinTech companies’ business models rely heavily on AI algorithms and historical data of users’ credit scores and consumption habits. The pandemic has made most of this information unreliable, and in some cases even useless. Companies need to reinvent themselves and seek new sources of information to recalibrate their models. 

The Ugly


As millions of people are being laid off or unable to work, others remain uncertain of the future. Consumption in many non-essential industries has seen a major fall, affecting the circulation of money in the economy. With less money to buy certain goods and services, FinTech companies need to focus on delivering products that fall within households’ priorities. The same goes for B2B FinTech products. 

Being unable to adapt to consumers’ needs will surely result in losses. Now is not the time to be rigid about how you think, although this does not mean that you should throw everything out the window. 

Uncertainty and Risk

Countries and central banks are reducing their interest rates, affecting FinTech companies in one way or another. Companies that depend on high volumes of transactions are the ones being hit hardest by this. This will make them focus on more transactions in order to compensate for the decrease in revenue. 

The safe strategy is to focus on reducing stress on cash flow while keeping operations running and waiting for the economy to recover. In other words, the strategy should be to adapt and then wait for the recovery. To do so, FinTech companies and investors seem to be focusing on variable revenues and costs rather than on fixed assets.  

A key aspect to keep track of is regulation. Governments are making all kinds of maneuvers to keep the economy going, so being up to date with regulatory measures is a must. Keep in mind that government deals announced are not the same as deals that have been actually executed. 

The Good

The Digital Transformation

You are probably tired of hearing this term by now, but you’ll have to get used to it because it’s going to be around for a while. FinTech companies are not immune to shifts on the way we work as a result of the pandemic. The ones that are prepared to operate under remote or strained conditions will have better results. Remote working will be a must for many industries, and luckily, FinTech was one of the best prepared for it.


Opportunities are everywhere, even if they are hard to spot. While almost everyone can admit that these are some tough times, most eCommerce managers will say the contrary. This is one of the industries that has seen a spike in sales. FinTech has a great opportunity both in eCommerce customers as well as companies that need to grow to satisfy the increase in online demand. 

There seems to be a whole new market of companies that are seeking FinTech apps to help them adapt their businesses to the digital world. Technologies and services like payment gateways, microloans, and BaaS are in demand. At Koombea we are excited to see what new FinTech apps will be developed in order to confront the crisis. 

Contactless Finance

The future is contactless. While today many financial institutions still operate strongly on brick and mortar offices, we expect the coming years to see an increase in digital solutions. Many services will be totally migrated to the cloud, making web and mobile apps the perfect solution for customers. 

Non-financial Shock

Most of the past century’s economic downturns have directly or indirectly originated in the financial industry. This time is different. Finance, although affected, is not the origin of the crisis. The world is seeing a shock in supply and demand, and in order to recover, it is necessary to keep the financial system’s health. Solutions that can help the system stay afloat will stand out. 

Resilience is Key

The current situation can be summed up in one word: uncertainty. Whether you are thinking in terms of challenges or opportunities, there is a lot we don’t know about. We have yet to see how the current situation will evolve. The one thing we know for sure is that being resilient in the face of adversity will be necessary. 

One of the strongest trends we expect to see throughout 2020 and in the coming years is an increase in FinTech app development. Existing and new companies will need trusted and qualified development partners that can help them achieve their goals by developing world-class apps. 

Koombea has over 12 years of experience helping FinTech companies bring ideas to life. If you have a great idea or think your company can benefit from working with us, schedule a free consultation. Contact us and make sure that your company stays afloat throughout this crisis.

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