How fintech industry can prepare itself before third wave of COVID hits?
As Indias devastating second COVID-19 wave recedes, health and policy experts have called for heightened preparation to prevent a possible third wave. It's not only the health care department who needs to be prepared; all the industries and sectors including the Fintech segment need to pull up their socks as well. As amid rising fears of COVID-19 third wave spread, more challenges and opportunities shall unfold. Scale-up Infrastructure for 3-5 times current max volumes  Digitisation has accelerated dramatically due to Covid. Many fintech businesses like digital and online payments have witnessed major growth in the last year. Talking about the stats, almost 42 percent of Indians switched to digital payment options during the first lockdown and the number grew to 76 percent in March 2021. In the last 6 months over 50 percent of the digital adoption is observed in Tier2 and Tier 3 cities, even traditional and brick and mortar businesses are embracing digital payments these days. In order to prepare for the next wave, Fintechs should consider preparing for 3-5 times transaction volumes increase and align their hardware, cloud, infrastructure as well as software, accordingly. This will help them grow seamlessly with consistent offerings, leading to satisfied customers. Enhance your customers digital onboarding experience (eKyc)  Offline customer signs up are becoming a trend of the past, with eKyc drastically becoming the norm since Covid, and predictable regulatory processes around them. As an example, around 11 million new demat accounts were opened in the financial year ending March 21. So, enhance your customer digital onboarding process to meet the demand for faster, easier and virtual eKyc. Enhance efficient remote working environment  Whilst the work cultures and efficient collaborations cannot be built on zoom, but Covid may not allow us to come back together in offices soon. You should enhance hardware, software and other related infrastructure to continue supporting remote working for your teams.  Moreover, do try to engage your teams better with some online fun events   Try to ensure your HR team engages with team members periodically to address any needs they have, covid related or other problems, and especially ensure they are not facing mental health challenges without the office social face to face environment   Keep back up resources/bench strength as a buffer to fill in for any team members falling sick due to covid, which was highly prevalent in the 2nd Covid wave in April 2021  Plan for Financial Stress:  We should all hope for the best, but prepare for the worst. Fintechs should ensure they can manage cash-flows in the events of extreme stress. As an example, if you're a digital lending company, your stress scenario may include higher than normal loan defaults and massive new loan demands. How do you manage your risk, and credit lines for additional lending to your clients, can help you come out of these scenarios as a survivor and possibly even a winner. Be prepared to raise money and/or create credit lines for additional funds. Invest in Cybersecurity:  Cybersecurity has become a big challenge as the crimes also become digital post-Covid. Such crimes may include loss of data, digital identity theft, stealing money, ransomware attacks, software / IP theft, etc. As an unfortunate example, millions of Mobikwik users data was leaked online in March 2021. Such incidents, while not punished by the regulators yet, can still lead to massive trust breach between the fintechs and their customers. Poorly designed applications, inaccurate coupled software and hardware combinations, insecure data layers, etc. can lead to gaping holes which open up for such cyber crimes. This can be addressed by using secure architecture and infrastructure, encryption at all levels, zero-knowledge data storage systems, multi-factor dynamic authentications, etc. The author, Kunal Nandwani, is Co-Founder and CEO at uTrade Solutions. The views expressed are personal