The coronavirus pandemic has affected different sectors of the economy in different ways. Retail, leisure and hospitality businesses have had to close their doors, and while some retail and hospitality businesses have been able to adapt to an online delivery model, many leisure and tourism are just having to sit it out and hope government support will help make up for some of their loss of income.
Businesses in other sectors such as manufacturing have been able to stay open, many converting their production to making things urgently needed by the health and care services. Digital services firms are seeing a surge in demand for some of their products and services as many businesses move to a remote working model, sending the share price of video chat providers booming.
Law firms have also seen a surge in demand as people rush to get their wills written. The fintech sector – built around the idea that banks and other financial services businesses would use increasingly more sophisticated technology over the years to come – is seeing an accelerating demand for its services as a result of Covid-19. Shops are seeing a big increase in the number of people making contactless card or mobile app payments as people are being officially discouraged from paying by cash. A surge in online shopping means online payment systems are also being used more heavily.
All this was the direction we were already travelling in, we have just changed into a higher gear. And if, as many think, the economic shock of the pandemic combines with the forced rise in home working to permanently change our economy, it’s likely that fintech will play an even bigger role in our future than was already thought.
Fortunately for Cardiff Capital Region, the City Deal had already identified fintech as a key sector that would be a priority for investment support. The region has been able to build on its strength in financial services and digital technology to attract and retain both incoming and home grown fintech businesses in recent years.
Companies such as Backbase, which provides digital banking solutions to banks and financial services providers around the world, and set up its UK R&D centre in Cardiff in 2017. Sonovate, which provides payment and back office solutions to recruitment agencies, and also set up a Cardiff office in 2017. And Currency Cloud, the global payments provider which opened its Cardiff office in May 2019.
These are companies that have been attracted into the region because of its growing fintech cluster. Then there are the home grown businesses, such as Wealthify, the online investment service co-founded by Richard Theo, founding member of industry body Fintech Wales and the UK Government’s fintech envoy for Wales; and Amplyfi, the Cardiff fintech founded by four young technology and disruptive business specialists, which uses artificial intelligence to scan the deep web to provide rapid business intelligence.
Right now the region’s priority is to support businesses in all sectors that are struggling in the coronavirus pandemic, and help them access the support on offer from government at all levels. But fintech will surely play a big part in the recovery, when it comes. As a sector, it admirably fits CCR’s objectives to create a region that is more connected, more competitive and more resilient. These are the qualities that Cardiff Capital Region will need more than ever as it rebuilds after Covid-19.