Jun 22, 2020

Impact of COVID-19 on the FinTech Industry

Kayleigh Shooter
3 min
Piggy bank
Impact of COVID-19 on the FinTech Industry - A Perspective from Ganeshan Venkateshwaran, President, Trianz...

In a matter of months, the COVID-19 pandemic has forever changed our world. What started as a global standstill is quickly turning into a race to adapt as new data pours in, and we get a better vision of our new reality. With global productivity still in recovery, we are facing an unprecedented economic downturn that will impact the financial stability of individuals and businesses for months and even years to come. Though short-term recovery plans will enable many to survive the fallout, it will take a long-term outlook for employees and enterprises to thrive in the post-COVID landscape. 

In this new normal, robust financial services will be a lifeline for many individuals and enterprises. Companies that provide digital financial services (FinTech) are better placed to take advantage of this situation. FinTech must be prepared not just to accommodate this increased demand but also to scale up their enterprise IT infrastructure while adapting to the new world, just like everyone else. 

Established enterprises vs. startups – a David and Goliath situation

FinTech startups are smaller in size, which makes them more susceptible to short-term business disruption. But their size also works in their favor. FinTech startups have a fresh canvas, allowing them to develop a modern, performant FinTech solution without the hassles of migrating from old technologies. This gives them a technological edge, attracting a younger digital-first audience to their services.

In contrast, larger financial institutions have been slow to adopt new technologies due to the monolithic nature of their aging IT infrastructure and services. Rather than developing new technologies internally, larger enterprises often acquire smaller startups and attempt to integrate their systems. Often, the integration fails due to the incompatibility of this mixed pot of hardware and software, resulting in workarounds that compromise both IT performance and security.

For larger enterprises, this highlights the need for a new IT foundation with modern technologies, if they want to compete with new startups. Today’s consumers are expanding their horizons by trusting less established brands while reaping the rewards in the form of better digital experiences. So, while FinTech startups do have a technological advantage, they will need to keep an eye on their capital reserves to make it through COVID-19.

Combating COVID-19 with digital transformation

COVID-19 is forcing the hand of many businesses like no other crisis. The pandemic has also revealed the fragile nature of enterprise IT infrastructures, as they buckle under the weight of increased demand and reduced IT service desk capacity.

Some enterprises may have ‘IT Champion’ initiatives in place for devolution of technical support. While they can ease the service desk burden, only the IT engineers can deal with real problems, as these “champions” have insufficient working knowledge or authorization for IT operations management. This shows urgent demand for IT technical skills at the helpdesk. One of the most promising solutions to COVID-19 is Intelligent Automation (IA). Your staff can be susceptible to the virus, but technologies like AI and ML are immune. And, slowly and steadily, this may be the advent of a paradigm shift in enterprise IT operations management, where enterprises hand over more control to these technologies.

In the words of Ganeshan Venkateshwaran, President of the IT services & consulting firm Trianz:

“Digital-first enterprises are experiencing an unprecedented demand for their services. This demand is guaranteed to take the paper off the hidden cracks in enterprise IT networks, putting business and service continuity at risk. The drop in revenues combined with shrinking margins will drive enterprises to think leaner and smarter.”

We are on the cusp of an AI and ML revolution in enterprise IT and early adopters are set to benefit the most. They will have smaller IT teams with no compromise on productivity. AI and ML will provide holistic 24/7 monitoring and automated remediation, giving these smaller teams more actionable insights than their larger counterparts. Some enterprises may throw human resources at the problem, but tighter margins and increasing costs will significantly reduce the viability of the traditional IT service desk.
 

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Aug 1, 2021

Who Will Be the Next Tech Giant to Back Bitcoin?

Bitcoin
Apple
Microsoft
Amazon
Simon Chandler, Writer at Cryp...
4 min
Simon Chandler from Cryptovantage discusses Bitcoin in the technology sector and discusses rumours around which tech giant will be next to buy it,

PayPal was the first truly major tech giant to throw its weight behind Bitcoin, unveiling a cryptocurrency buying-and-selling service in October. Next was Tesla, which shocked onlookers in February by announcing the purchase of $1.5 billion in bitcoin, as well as plans to accept the cryptocurrency as payment.

 Since then, things have calmed down as far as Big Tech and Bitcoin are concerned (although a number of banks have rolled out cryptocurrency investment services for their wealthier clients). This raises the question: when will another significant tech firm take the plunge and back bitcoin?

This is a difficult question to answer, if only because the bitcoin market is in something of a funk right now. At the same time, regulators worldwide are looking to restrict crypto in the name of curbing money laundering and other illicit activities. Nonetheless, rumours continue to swirl through the sector that a few other important names in the tech industry may be on the cusp of embracing bitcoin, with Apple being the most notable.

Is Apple Buying Bitcoin?

If you tend to spend any amount of time on Crypto Twitter, you may be aware of rumours to the effect that Apple has recently bought something in the region of $2.5 billion in bitcoin.

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Such rumours were almost certainly a desperate attempt to boost the price of bitcoin. And given that the market didn’t witness a sudden, dramatic rise (but rather a steep loss), it seems pretty clear that Apple didn’t buy a substantial quantity of bitcoin in the past few weeks or so.

That said, there remains a good chance that Apple will enter the cryptocurrency sector at some point, even if it won’t be adventurous enough to buy crypto for itself. Back in May, it placed a job ad for a business development manager for “alternative payments.” 

Such a manager would be tasked with cultivating partnerships with “strategic alternative payment providers,” implying that Apple may be weighing up the possibility of launching its own cryptocurrency-purchasing service (à la PayPal) via Apple Pay.

Needless to say, it would be huge for Bitcoin and cryptocurrency if the Cupertino company were to follow through with this.

Microsoft, Amazon, Facebook?

Rumours have also revolved around possible bitcoin interest from Microsoft, Amazon and Facebook, although there’s a little less substance to most of these rumours.

Back in October former Goldman Sachs hedge fund manager Raoul Pal predicted that Microsoft (along with Apple) would buy bitcoin in five years. Unfortunately, a CNN interview with Microsoft’s Brad Smith in February (shortly after Tesla’s bitcoin purchase) revealed that the company had no plans to purchase crypto, although Smith vaguely hinted that it might one day change its collective mind.

More interestingly, Amazon purchased three cryptocurrency-related domain names back in 2017: amazonethereum.com, amazoncryptocurrency.com, amazoncryptocurrencies.com. Nothing has been heard since then, while a job listing from February of this year revealed that the retail giant may be planning to launch its very own digital currency.

Facebook is another tech firm with plans for its own digital currency (Diem, formerly known as Libra). As for whether it’s likely to turn to bitcoin, a few relatively respected figures within the cryptocurrency industry (e.g. Alistair Milne) did spread rumours in April that the social media company would disclose bitcoin holdings on its Q1 financial statement. This didn’t happen, although Mark Zuckerberg did reveal in May that one of his pet goats is called “Bitcoin,” fuelling further speculation as to his and his firm’s interest in the cryptocurrency.

Risks and Rewards of Cryptocurrency

Again, it’s arguable that some or most of the rumours are generated largely to pump crypto prices. But if bitcoin and other cryptocurrencies do continue to appreciate in value and attract more adoption, it will become increasingly harder for large tech companies to ignore them.

But at the moment, it’s likely that most major tech firms will shy away from actually buying bitcoin, if only because it remains highly volatile and unpredictable as an asset. And as we saw with Tesla, buying a massive chunk of the cryptocurrency effectively turns you into a hedge fund overnight, something which can adversely affect your stock price if bitcoin goes down.

 Even so, there’s clearly a considerable amount of money tied up in the cryptocurrency market. And with numbers of holders growing every year, it’s only a matter of time before other big tech firms attempt to siphon off some of this value for themselves.

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