The global COVID-19 impact on the financial services industry in South Africa

Abstract

Background: In December 2019, coronavirus disease 2019 (COVID-19) was detected in Wuhan, China. This virus quickly spread throughout different regions and was declared a pandemic late in January 2020. The spread of the virus has affected every aspect of human life as previously known.Objectives: This study aimed to investigate the impact of COVID-19 on the adoption of fintechs in South Africa.Method: Eighteen financial services experts were interviewed using semi-structured interviews to collect data, and ATLAS.ti 28 was used to analyse the data.Results: During the lockdowns, the industry expedited the implementation of fintech to sustain business operations. Online shopping, mobile payments, and digital banking experienced a surge in adoption as individuals steered clear of crowded stores and bank branches. The upswing in online shopping influenced the embrace of mobile payments and contactless cashless transactions. Moreover, with limited access to physical bank branches, there was a marked shift towards digital banking.Conclusion: Fintech companies have introduced consumers to alternative financial technologies. The pandemic has accelerated the adoption of fintech as an essential means of transacting and banking. One limitation of the study is its timing because it was conducted during and immediately after the pandemic, therefore, it does not account for the long-term effects of the pandemic on the financial services industry. Consequently, future research could explore the impact of COVID-19 on the industry 5-10 years after the pandemic to evaluate any significant influence on the industry’s transformation.Contribution: This study will assist the financial services industry to better respond to catastrophes such as COVID-19.