The coronavirus has already caused havoc around the world, but what can businesses do to survive?
Many parts of the world have gone into lockdown, forcing employees to work from home while others have had to shut their doors temporarily. The virus is not going anywhere soon, which will mean even tougher times are just around the corner for some companies. As a result, most will have to take a hard look at what they are doing and see what they can do to get to the other side. There is light at the end of the tunnel, regardless of how long this lasts, people will still need FinTechs.
One of the key steps all firms will need to do is ensure their businesses are running efficiently and any needless costs or expenditures are stopped. Stefan Wagner, associate professor of strategy at non-profit business school ESMT Berlin, said, “’Keep calm and keep going’ – this universal rule applies to all business at the moment and also to FinTechs.” He went on to explain that everyone is in this together and will have their share of problems. Governments around the world enforcing lockdowns and for people to work from home and FinTechs may be better suited to remote working other more traditional institutions, due to their technology-based infrastructures. However, FinTechs will more likely suffer from the drop in liquidity and a slowdown on demand impacting their revenue. Despite how established a company is, changes will need to be made.
Governments around the world have been trying to ease the impact as best they can. Among a host of regulatory changes such as a hold off on stress tests, relaxed enforcement of communication monitoring and the banning of short selling. The European Securities and Markets Authority (ESMA) even offered its own advice to businesses and how they can protect themselves. Its main suggestions were the deployment of business continuity measures, to ensure operational continuity in line with regulatory obligations.
In addition to the easing of regulatory burdens, governments have been offering more direct financial support. The UK has a furloughed employment scheme where it will pay up to 80% of a person’s wages who can no longer work during the pandemic. It has also established a £330bn package to fund businesses impacted from the crisis. Other countries are doing the same, France, Germany, Australia, India, Japan and Spain all have similar initiatives. The US, which is seeing infection increase rapidly, has just revealed a $2trn stimulus plan which will support businesses, families, loans and hospital aid.
Sukhi Jutla co-founder of online marketplace for jewellery, MarketOrders said, “Prepare for a tough ride ahead in these unprecedented times. It’s going to be tough and there will be lots of unexpected challenges that, as founder, you will have to be creative in finding a solution to.”
There is a lot of work out there to try and stop businesses collapsing, but they will still need to do everything they can to ensure they make it through.
Re-think strategies
Times like these call for businesses to reassess what they are doing, looking at the whole picture and finding out where there are wasted resources. Having this veil over the future of the market and when revenue can return back to a normal state requires a business to become stricter with what money it does have.
Some of the tips offered to FinTechs and reworking their strategies were to take stock and build a business plan, look for an online alternative to products, lowering overheads, negotiating contracts and revising costs. One of the easiest ways to save money, is by not spending it in the first place.
MarketOrders’ Sukhi Jutla said, “Cut back on non-essential spending and longer-term commitments and projects and focus on ensuring you have cash flow to get you through the next few months. Try to apply for other types of funding such as loans or negotiate credit terms with suppliers if possible.”
While things are a little worrying at the moment, this could be an opportunity for businesses to get back on track and make cuts which would have been left to syphon off funds had the pandemic not occurred.
Frank Zhou, CEO and founder of money management platform Zeux “Times like these are hard for many, but can also bring positive innovation. ‘Adapt or lose’ applies now more than ever – whether it comes to internal operations or product offerings. Be agile, use technologies to your advantage and remain competitive.” He went on to explain that times like these offer the opportunity to sit down and look at the product, services and performance and build a clear strategy for the current market and the one after the pandemic.
Not everything is doom and gloom for FinTechs, and some could even benefit from the virus. A recent study from Bold In Finance even claimed the UK digital bank Revolut could see their customer numbers jump up by millions within just a couple of months due to the current crisis. It claims its figures could increase from the 10.8 million users it had in February to 13 million by June. In 2021, the figure is expected to hit 16 million. This rise in numbers is coming from governments encouraging people to not use cash or visit their branches. While the data is only for Revolut, it could see similar results for other digital banks.
Vilve Vene, CEO and co-founder of core banking platform Modularbank, said, “Our advice to other FinTech players in the market right now would be first and foremost to analyse your business model and to think about how you can adapt to support a new reality and a population with everyday challenges never yet experienced before. Companies that can do this will be the ones that will weather the storm.”
Think of the customer
Customers are always going to panic. The stockpiling of toilet paper and pasta has shown people can get caught up in hype and react drastically. With the uncertainty of jobs, individuals and companies may be more cautious of their spending or they may be scared other places will close and leave them without what they have paid for. Alleviating these worries is a major step for businesses and creating goodwill with customers may make them stick around longer post-pandemic.
Andy Schmidt, president at IT and business consulting service CGI, said, “Stay in touch and keep delivering. This is the time where your clients need you the most. Stay in touch with them, let them know how your firm is adapting to the pandemic, and be clear if not creative about how you can help them during this difficult time.”
There are a number of FinTechs which have offered their services for free to those impacted by the virus or are working to combat it. Digital identity startup Yoti revealed it would give its services to healthcare organisations free of charge during this pandemic. Its move is to help ease stress when digitally onboarding the masses of new patients and staff. Digital bank NorthOne is also providing companies with help. During the pandemic, the challenger bank will offer free banking services to all businesses that are in areas which have been significantly impacted by the coronavirus.
Zeux CEO and founder Frank Zhou said, “sincere social responsibility is important in times like these to maintain positive relationships with the community and clients. Zeux always provides zero-fee for payments and foreign currency transactions and continues to do so during this time. On a wider note, our team has been donating face masks both to China and our clients, since the beginning of the virus.”
One of the key steps FinTechs should be doing is adapting their operations and ensuring seamless communication and customer support, with hotlines a good way to ensure customers can ask questions they need to. “It’s important to make customers feel safe and provide crucial and updated information,” he added.
Making the team feel connected
Businesses across the globe have had to make their employees work remotely from their own homes. This puts a lot of pressure on businesses and employees. While the prospect of working from your house may seem appealing at first, there are many challenges.
One of the biggest difficulties is businesses not even being prepared for their staff to work from home. A recent study from workplace analytics firm Leesman claimed that the UK financial services is not prepared for the majority of its staff to work from home. The company surveyed over 700,000 employees around the world, of which, 265,840 were working in the financial services sector. Of those respondents, 56% had never had any home working experience.
Most homes are not prepped for long periods of working from home. Systems might not be as new or secure and security and compliance measures may not be enforced remotely. Most of all. It can be lonely without the team. Its easy to lose focus or feel like an independent worker when there are no colleagues to speak with or bounce ideas off of.
ESMT Berlin associate professor of strategy Stefan Wagner said, “From a leadership perspective, it is most important to keep the spirit amongst all team members up during these challenging times. Employees are faced with a tremendous amount of uncertainty and ambiguity while working from home in relative isolation. In this situation, regular virtual team meetings are probably the best means to keep everyone engaged and motivated. Clear communication of the current status within the organization and the short-term plan can help to address anxiety amongst employees.”
Stick to objectives and push through
With the world in maximum panic mode, it is easy for businesses to get caught up in everything and forget where they are. Businesses need to push on and get on with things. There may be less business but that does not mean giving up. Andrew White, managing associate and UK and European patent attorney at Intellectual Property firm, Mathys & Squire said, “Devote some time and energy to aspects of the business that were being overlooked in busier times. Think of it as an investment in your own business.”
Businesses need to have the confidence that their products are needed in the market enough to succeed now and post coronavirus and just need to keep doing what they can.
Zoe Adamovicz, co-founder and CEO of fundraising platform Neufund, said, “It’s also vital for startups to keep their objectives at the forefront of thinking. There will undoubtedly be times when the going is tough, but organisations have to keep plugging away. Ensuring that employees understand their role and the team grow its performing – an imperative component of success.”
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