When COVID-19 was first discovered in December 2019, few could have predicted just how big of an impact on our society it would have. Now, one year later, the coronavirus pandemic still holds the world in an iron grip. Countries around the world seem to be stuck in a perennial loop, forced to choose between implementing lockdowns to stop the spread of the virus and save human lives and loosening restrictions to keep the economy running. Many have described it as a lose-lose scenario. While the closures of non-essential business have been instrumental in reducing the number of infections, they have also had a devastating impact on various sectors, the consequences of which may ultimately turn out to be worse than the virus itself. However, not every sector has been equally affected. Some have even managed to thrive in the new normal, while others are just trying to keep their heads above the water. So, where exactly does finance fall in?

The impact of COVID-19 on finance

The coronavirus pandemic has significantly accelerated the digital transformation of the finance sector. However, this ongoing transformation will not be restricted to financial institutions’ internal work processes but will also encompass customer interaction. The latter will be reflected in major structural changes in customer service centres, such as the transition to remote work and growing reliance on chatbots and virtual assistants. These automated solutions have become increasingly sophisticated in recent years and capable of performing ever more complex tasks, allowing customer service staff to focus on improving their empathic skills so that they could better help customers deal with their problems during this difficult time. The growing prevalence of remote work may have been an unexpected development but it’s likely to remain a permanent one, as it not only improves employee efficiency but also enables financial institutions to significantly reduce their costs by dispensing with some of their physical structures.

The pandemic is also likely to force consumers to adopt a more conservative approach to their finances. While this will have a negative impact on certain product lines, such as mutual funds for example, it will be offset by a growing demand for digital banking services. To respond adequately to this new demand, financial institutions will need to invest in the development of innovative fintech tools, whether in-house or in partnership with emerging fintech startups. Biometrics technology, whether in the form of voice or facial recognition systems, is one such tool. It allows consumers to access their financial services in a safe way, without having to physically touch any surface or interact with another person, and it’s becoming increasingly sought after across sectors. According to a recent report, the market for biometric technologies is predicted to grow from $16.6 billion in 2019 to $55.4 billion in 2027.

How financial institutions are responding to the crisis

The adoption of VR technology accelerates

Due to the pandemic, as many as 90 per cent of employees at some of the world’s largest financial institutions now work from home. While remote work does offer numerous advantages, it also comes with certain drawbacks. Namely, a lot of people crave the interaction with their colleagues that characterises office work and being cooped up at home can make them feel isolated and negatively affect their morale. To address this problem, a number of financial institutions are experimenting with virtual reality technology. Once dismissed as nothing more than a gimmick, VR has become an increasingly valuable tool in the finance sector, allowing financial institutions to not only alleviate the sense of isolation their homebound employees feel but also recreate certain real-world aspects of their business in a virtual environment, such as networking and training events.

For instance, the investment management firm Fidelity International introduced a VR auditorium that enables executives to walk through virtual isles and interact with their colleagues. The company also revealed plans to use VR to facilitate communication between sales teams and their clients. Similarly, Swiss Bank UBS supplied some of its traders with the Microsoft HoloLens VR headsets to enable them to “recreate the trading floor experience at home,” while PwC and American Express used the virtual reality presentation platform VRtuoso to enhance their sales efforts and facilitate training. PwC estimates that immersive technologies could help save banks up to $1.5 trillion by 2030, with VR applications alone accounting for $500 billion of said figure. “I think the pandemic has changed people’s perception on what’s possible and what’s feasible,” says Stuart Warner, head of technology at Fidelity International.

AI helps process loans and prevent money laundering

The COVID-19 pandemic has pushed thousands of companies to the brink of bankruptcy, forcing them to turn to banks for help. To deal with the sudden influx of loan requests and alleviate some of the burden off of their human workers, banks bolstered their ranks with AI-powered ‘employees’. Banco Santander’s UK division, for instance, introduced data analytics tools to streamline its loan application processing and credit checking processes. They also formed a partnership with the Israel-based cyber security and big data analytics company ThetaRay to deploy its anti-money laundering (AML) solution, which uses artificial intelligence and machine learning technologies to analyse banking transactions and identify anomalous activity. To help them better understand why algorithms flag certain transactions, the bank will also be given access to ThetaRay’s Investigation Centre. “By working hand in hand with [ThetaRay], we were able to customise their solution for our specific use and we agreed on a roadmap with new functionalities that will come and enrich the project,” explains Luis Pinedo, Santander’s global vice president of financial crime compliance (FCC) controls and transformation.

Predictions for the future of finance

The future of finance is digital

The COVID-19 pandemic has brought numerous changes to the world of finance. As more and more people turn to digital transactions to complement their growing preference for online shopping, businesses in the sector will have to adapt accordingly and adopt digital technologies themselves if they want to remain relevant in the new normal. “Lockdown has totally transformed the way individuals interact with businesses,” says Matt Hicks, the Commercial Director at Codat. “The digitisation and personalisation of the application process and the free flow of relevant data from customer to bank can lead to far better customer service/ relationship management.”

A similar view is shared by Alastair Thomson, Finance Director at FD Centre. “COVID-19 has given an insight into how businesses and individuals can manage their financial affairs differently. In itself, it’s not brought new ideas to the fore, but it has accelerated the adoption of ideas which were already in place, if little used, pre-COVID-19,” says Thomson. “When was the last time you used cash to pay for anything, or didn’t pay via Contactless or an app like Apple Pay, for example? They existed before, but the uptake has been greatly accelerated due to COVID-19.” Matthieu Barral, SVP of, adds that “COVID-19 has served as a reminder for business owners that technology and customer experience can help them grow and be profitable. Greater control over payments and cash flow at all times enable you to make better business decisions, informed by data.”

AI will have a crucial role in the future of finance

Financial institutions will increasingly rely on artificial intelligence technology to streamline their operations, according to Debasmita Das, Senior AI Specialist at Mastercard. “AI will play an important role in helping the financial institutes with smarter underwriting decisioning processes — developing solutions to assess the credit worthiness of borrowers (like SMEs) with no credit history. Risk can be managed better if AI algorithms can be developed to generate accurate predictions — using a combination of cloud-based and on-premise AI solutions, FIs will be focusing on combating different risks like fraud, detecting point of compromises and money laundering,” explains Das. “Cybersecurity is a major pain-point for the financial institutes and with so much emphasis on digital transactions, special care needs to be taken to enable adequate checks to enable seamless risk-free transactions. AI will also have large scale implementations in Trading for ranking stocks, generating short and long-term forecasts and analyse unstructured textual data like transcripts, researches, filings and market news to identify patterns in market price-changes. Companies would also invest in Conversational AI as well as virtual financial assistants in the personal banking space.”

Jeff Sharpe, Senior Manager/Tech Lead at CapitalOne, agrees that AI will have a major role in the future of finance. “AI has been transforming the finance sector for years. However, COVID-19 has forced us to become a more digital society…I suspect that many of these patterns will be permanent. While digital banking isn’t new, the use of AI and data science in interacting with customers will become a critical solution to the increasing number of people relying on it in the coming year,” says Sharpe.

Financial management returns to prominence

The COVID-19 pandemic has also made people more aware of the importance of financial management, which will become increasingly automated in the future. “Banking and accounting data will have fully converged by then. The challenge then will be interpreting data and using it to inform decisions rather than collating good quality data. That’s where humans will play a key role,” says Andrew Garvey, CCO of CountingUp. “Financial services have changed irrevocably as a result of the pandemic. Face-to-face interactions and transactions are becoming a thing of the past.”

There will be less and less demand for the human touch in financial services. “Given that Millennials don’t want in-person solutions, personal finance by 2030 will be driven by tech, big data, and applied AI. The advice gap, currently impacting 19.8 million people in the UK, will be reduced by tech and the need for financial advisors will be reserved only for complicated issues,” says Sam Short, CEO of Moneyed. Similarly, Emma Mayer, Head of Marketing at TrueLayer, predicts that “In the future, consumers can expect to manage their entire financial lives online – you’ll no longer need to visit a bank to open an account or apply for a loan.”


It may have started out as a health crisis, but the COVID-19 pandemic has since evolved into an economic one as well, possibly the biggest the world has even seen. Its impact on the finance sector has been profound, kickstarting a digital transformation of the entire sector and bringing about major structural changes. To remain relevant in the new normal, in which face-to-face interactions are becoming increasingly undesirable, financial institutions were forced to implement innovative technologies that facilitate contactless transactions and enable consumers to access their services online. From artificial intelligence to virtual reality, digital technology will take on an increasingly prominent role in the future of finance, forever changing how we manage and spend our money.