How the coronavirus could impact NZ’s financial sector

Auckland - A leading New Zealand fintech experts says the coronavirus is significantly affecting the Kiwi financial sector and the economy.

FintechNZ general manager James Brown says the impact has begun, but he is not sure for how long. He says there are different ways the virus could change the fintech landscape across industries.

“It could grow demand for certain insurance types. The virus has resulted in more awareness of insurance and could increase demand for health and life coverage, as well as business interruption and sport, music, conference event cancellation coverage,” Brown says.

“Insurances companies are often cautious in what they cover and most don’t include things like a pandemic, certain infectious diseases so the virus should not harm these companies.

“For some insurance companies, the virus could be a good thing. Health and life insurance could grow with more people looking to get cover. Insurance for event cancellation will be on the rise.

“We are an island nation, so we have some advantages. Technology will keep us connected, secure and sensitive conversations will continue to take place.

“Companies with digital products will do really well during this time. Are banks prepared to support their customers that don’t use digital products or have smartphones?

“Should the Financial Markets Authority think about removing regulations to help drive and scale fintechs?

“Stock markets have been fidgety in the past few weeks, with some New Zealand analysts suggesting or talking about a recession.

In the US, the Federal Reserve has already applied an emergency rate cut, which is the biggest since in the US since the global financial crisis (GFC).

“A leading global investor Goldman Sachs will from today divide its 38,000-plus global workforce between offices, back-up sites and home in response to deal with the virus.

“This comes hard on the heels of rival JPMorgan announcing similar measures to protect staff from Covid-19.

“So now in New Zealand, we are beginning to do business in the virtual world by shifting our EQ, rather than shaking hands.

“For those that lived through the GFC, it has made us think about the way we made payments and the value of money. COVID-19 could easily lead to re-thinking work and business.

“So as long as companies can measure the output and not the input, we will increase our productivity levels, attract more talent and grow investment into New Zealand.

“Many of our big fintech companies, such as Xero, Montoux, Vend and TSG will be making smart decisions.

“Today, we could say the Future of Work is here and COVID-19 is accelerating and forcing the coming together of digital and physical assets,” Brown says.

FintechNZ is part of the NZTech Alliance which represents more than 1000 businesses and organisations.

For further information contact Make Lemonade news director Kip Brook on 0275 030188.

Photo: James Brown