Published by linker 5
Posted on December 23, 2020
4 min readLast updated: January 21, 2026
By Ben Edwards, Pensar Media
The global fintech industry is expected to make a quick recovery from the coronavirus pandemic as fintech leaders say disruption from Covid-19 is unlikely to cause lasting damage to their businesses, according to a new survey from Pensar Media.
The survey—Pandemic Pains: How the Covid-19 Crisis is Impacting the Fintech Industry—found that more than half of senior fintech professionals (55%) expect the industry to recover in 12 months or less. A further 43% of respondents said they are also more positive about the health of the industry now than at the start of the pandemic, with only 16% saying they are more pessimistic.
“You can’t keep a good fintech down,” says Simon Cureton, CEO at Funding Options. “The UK fintech sector is full of resourceful agile people—if one way is blocked, they will just find another way.”
While 69% of survey respondents say the pandemic has had a negative impact on the fintech industry, that scale of that impact has been mixed. Respondents said challenger banks and online lenders had suffered the biggest impact from Covid-19, with regtech firms suffering the least.
That data and conversations with fintech leaders suggest the firms that were most impacted were the ones that are more dependent on consumer spending and therefore harder hit from the economic slowdown caused by lockdowns and travel restrictions. On the other hand, fintechs that provide the technology and infrastructure that supports advances in digital payments and open banking have been faring better.
Ben Edwards
“When you consider that the term fintech covers both B2B and B2C businesses, and covers stuff like lending, wealth, payments, insurance, investment, retail banking and much more—everything can be improved,” says Scott Mowbray, co-founder and CCO at Snoop. “And those improvements will be seen first coming out of an increasingly thriving fintech sector, all aimed at making our financial lives easier and more accessible. All the ingredients are present for explosive growth in fintech.”
Fintechs responded to the Covid-19 crisis in a number of different ways. The most popular response was to impose a hiring freeze (38%), followed by cutting wages (37%) and making redundancies (33%). Those steps could be reversed fairly swiftly, with 43% of firms saying they expect to hire more staff over the coming year and just under half (46%) saying they expect to ramp up investment in existing products and services.
Some fintech leaders remain cautious, however. Just over a third (37%) say there is a risk of further redundancies next year, with 46% saying there will be pressure to change or refine existing business models to survive. There is also a chance that a number of firms will experience economic difficulties next year, with 50% of respondents anticipating financial stress for anywhere between a quarter and half of all fintechs.
The ease at which fintechs can raise capital next year may also remain strained. While 29% of respondents reckon the ability for fintechs to raise funds over the next 12 months will increase, 43% expect it to be more difficult and 28% expect no change to the current situation.
However, there are trends that will be supportive for certain fintechs next year. The need for faster digital transformation across the financial services industry is creating an environment where demand for fintech products and services is likely to increase. Some 48% of respondents say demand will rise as a result of the pandemic, while 31% are betting on the emergence of new growth opportunities that didn’t exist pre-Covid.
“Like every sector, the fintech industry has been impacted by Covid and we’ve seen this most immediately with a shrinking of available funding,” said Todd Latham, chief growth officer at Currencycloud. “However, Covid has and will continue to accelerate demand for services offered by fintechs as the pandemic pushes financial services further online. Consumers will continue to flock to digital banks and other digital-first fintechs, while traditional financial institutions will turn to B2B fintechs to help the rapidly modernise.”
Some 58% of respondents are also predicting growth in fintech-related M&A activity over the next 12 months. Partnerships between fintechs and banks are also expected to increase.
“There is a better trend now of the larger banks that have now realised at a board level that digital transformation only got them to the CD stage of the digital world and they are going to have to partner with the fintech industry to get to the next level,” says Nigel Verdon, co-founder and CEO at Railsbank. “So the future is bright for the fintech industry—the trend will be more partnerships and working together between legacy institutions and fintech, which is better for the consumer too.”
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