Post-Covid, new forms of financial technology are beginning to lead the future of global retail, steadily delivering cybersecurity breakthroughs to e-commerce providers and breaking down borderless payment barriers as the traditional high street continues to decline.
In fact, in 2020 alone, the pandemic accelerated the growth of fintech funding, acquiring more US$25.6 billion in global investments in the first half of 2020. As retail giants and competing start-ups continue to move online, investing in fintech becomes vital, in order to compete with emerging global spending trends.
The pressure of Covid-19 on e-commerce
The pressure of Covid-19 on e-commerce has opened up new challenges for retail competitors. As traditional shopping street traffic dropped by 89% At the height of the pandemic, changing consumer shopping habits have driven e-commerce providers to provide impressive digital service, borderless payment systems and increased cybersecurity.
As the total transaction value of online payments has increased from the United States$4.1 trillion in 2019 for a whopping $5.4trn within a year, retail competitors have turned to adopting fintech in order to reach a global online audience and create a streamlined shopping experience that delivers the accessibility to all forms of digital payment.
Digitizing the future of retail
Fintech is powering the future of digital retail. Providing innovative solutions for protecting small businesses and positioning start-up retailers in the global marketplace, the adoption of fintech in the e-commerce landscape is growing rapidly.
In fact, a 2019 study by EY that collected data from 1,000 start-ups found that more than 25% had adopted fintech-based systems to digitize their payment and insurance processes for easy access. faster to global capital.
Trolley founder Tim Nixon said investing in fintech gives small businesses the opportunity to improve the seller experience and grow in the global marketplace. “Fintechs help marketplaces improve the seller experience, making it easier for sellers to set up and operate, and then grow their business, while helping the marketplace grow and enter new markets. This level of empowerment has generally not been the focus of traditional banks.”
As the engine of online retail vendors, fintech has become an essential part of the digitalization of global retail for a number of reasons.
Increase in fintech cybersecurity in the retail sector
While Covid-19 may have increased the number of e-commerce competitors vying for global success, it has also encouraged greater exposure to security threats that continue to cause data leaks in the retail industry. detail.
Geoff Forsyth, CISO at PCI Pal claimed that the rise of digital commerce has only increased the rise of digital fraud. In a PCI Pal survey, he explained that “more than three-quarters of respondents rated the recent increase in cybercrime and fraud among their top concerns impacting the way they shop.”
The use of fintech technology breaks down cybersecurity barriers and makes it easier for consumers to identify themselves online. Financial institutions are enthusiastically adopting fintech solutions to combat fraud and money laundering, and thereby secure both merchants and their customers. For example, Login, a UK acquirer, is successfully using an AI-based anti-fraud system that enables merchants to accept CNP payments quickly and securely. Using machine learning tools, these anti-fraud systems calculate transaction risk scores based on observed patterns. They work more effectively for ever-changing fraud than manual analysis, or work in synergy with the latter.
The birth of borderless payments
Fintech has quickly become the engine of the future of blockchain-based borderless payments. Facilitating decentralization of verification and eliminating intermediaries involved in the global transaction process makes global retail fast, secure and profitable spending.
On top of that, new fintech solutions like Square and Shopify in particular continue to improve the borderless shopping experience. Working to help expand the global reach of small businesses using Facebook integration, Shopify enables e-commerce startups to embed a fully functional Buy Button into their site for a global audience.
As blockchain payments become the new trend in the e-commerce industry, Fintech services enable retailers to provide cost-effective and efficient solutions for cross-border transfers. Take Wisefor example, rather than filling out traditional verification forms, Wise performs image-based verification, using photo ID to verify accounts.
The future of hyper-personalization and simplified payments
Today’s consumer needs digital personalization in their shopping experience. As e-commerce trends continue to evolve, fintech will be used to simplify the checkout process and create a one-on-one service experience similar to traditional retail formats.
Ian Pollari, co-leader of KMPG Australia, says fintech will need to follow the hyper-personalization standards set by big tech players such as Netflix and Uber if they really want to revolutionize the e-commerce industry.
“Big tech players have been very successful in the context of applying data analytics, AI, and cognitive thinking to personalize the customer experience and remove friction from business processes. When companies like Uber and Netflix can do it, consumers expect all companies to be able to do it.
As Fintech systems continue to evolve and create new opportunities for global retail, it won’t be long before the barrier of cross-border transactions is a challenge of the past, and fast and reliable global e-commerce be the future.
About the Author: Dmytro Spilka is a respected industry commentator on all things fintech. He is also the founder of Pridicto, a web analytics startup that allows users to forecast web traffic, monitor vital metrics in one place, and set visual traffic goals.