The pursuit of financial services innovation during COVID-19

The financial services industry has witnessed a surge in innovation due to the global COVID-19 pandemic. Financial providers around the globe have been forced to fundamentally rethink their business models to continue to serve their customers, many of whom could not leave their homes due to national lockdowns and physical distancing measures. Even some traditional microfinance institutions – many of which had never offered a self-service digital channel to their customers – quickly ideated and launched digital credit products delivered through SMS. Others have looked at new ways to provide customer support, such as designing solutions through popular chat channels like WhatsApp. Some financial service providers (FSPs) with existing digital channels witnessed transaction volumes increase by upwards of 200 percent compared to pre-pandemic rates. Nearly everyone dealt with reduced staff headcounts and disruptions to business continuity as the pandemic shuttered the doors of their small business customers at a frightening pace. small business customers at a frightening pace.