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in collaboration with ant group, Sustainable Finance Innovation Center at (CSFI) Nanyo Business School, Nanyang Technology university, Singapore (NTU Singapore) conducted this study. Economic Resilience During the Covid-19 Pandemic Role and Implications of Fintech.
Using GDP growth and unemployment rates as measures of economic resilience, the study found that countries and regions with higher fintech development had faster GDP growth recovery and job recovery during the pandemic. It turns out I was strong.
The findings suggest that fintech can be used as a tool to positively impact economic resilience, cushion shocks and accelerate recovery during crises. Research shows that fintech makes it easier and more convenient to provide and consume financial services through platforms such as mobile phone applications and other digital media. This is essential in mitigating disruptions caused by lockdowns and other virus control measures that restrict physical movement.
The study weighed fintech development against a total of 17 factors covering economic, social, political and healthcare indicators of the country. For example, trade level, population size, educational development, etc.
The results show that fintech has a strong positive impact on GDP growth in all countries surveyed. Similarly, the more developed a country’s fintech ecosystem, the lower its unemployment rate. Other factors influencing positive employment rates include pre-pandemic GDP per capita, strictness of social distancing policies, and population size.
An example of an Asian country that has achieved strong GDP growth resilience is Singapore. As one of the countries with the most developed fintech ecosystem in Southeast Asia, Singapore’s funding situation is less volatile compared to other countries in the region that have suffered significantly from a decline in fintech funding due to the pandemic. For Singapore, fintech investment rebounded rapidly by his second quarter of 2020, despite an initial dip in funding.
The fact that Singapore has suffered less than other countries is a testament to the unparalleled confidence investors and entrepreneurs have in the country as the region’s fintech hub. This confidence stems from active regulatory support, tax treaties, political stability, adherence to a free market economy, and the availability of talent, the study said.
The study also found that different aspects of fintech have different impacts on economic resilience.
Mobile payments, which consist of common payment tools such as digital wallets, have had a positive impact on both GDP growth and employment. Digital investment contributed to GDP growth and digital banking accelerated employment growth.
An analysis of global Google search data from 2017 to 2022 shows that searches for fintech-related terms surged after the covid-19 outbreak, and the trend has continued since. These terms include “mobile wallets,” “digital banking,” and “online investments.” The findings reflect sustained high interest in fintech services since the pandemic began. In particular, mobile payments are a major factor of interest.
Southeast Asia experienced a 50% increase in demand for fintech services from 2019 to 2020, coinciding with the outbreak of the pandemic. Of this demand, interest in mobile payments recorded his 80% rise. This is in line with the global trend we are seeing in the fintech services sector.
Despite lockdown protocols, people were still able to access daily necessities through online channels. So it’s no surprise that more people turned to mobile payments and fintech services to restore some degree of normality during the pandemic. As a result, covid-19 has fundamentally reshaped consumption habits and accelerated the development of the digital economy, the study says.
Francis Bignell
