While the Covid-19 pandemic was a distress for many companies, one industry was able to not just tough it out but also thrive: Fintech. The financial technology industry suffered significantly at the start of Covid like other industries but by taking advantage of the lockdown, it started digitalizing its financial services. Unlike the traditional financing institutions, FinTech, especially startups who took the risk of heavy investment during Covid, utilized cloud computing applications and stood out as the leading industry. Amazon Web Services’ cloud technology stood out the most among its competitors especially for the FinTech startups due to its easy handling and assisting services. This article is going to explain how taking the risk of investing in AWS during the crisis gave FinTech one of the biggest growth the market has ever witnessed.  

According to an article by Forbes magazine, between January and June 2020 alone, the global traffic in retail e-commerce increased by 35.5%. An increase in e-commerce led to an increase in the use of financial services like cashless transactions and mobile banking. And in another article, they reported that the investment in the FinTech industry almost doubled in 2021 nearly doubled from 2020 with the birth of forty-two FinTech unicorns in the third quarter of 2021. It would not be wrong to call Covid-19 a trigger for the rapid growth that FinTech showed by adapting in time. 

What did AWS offer FinTech Startups for it to grow with this pace? 

The demand for digital financial services rose due to the pandemic which also accelerated the use of cloud collaboration tools like AWS. AWS played a key role in the industry’s rapid growth, especially for the decisive startups, as it provided them with most of the tools and services that were required. Some of the main factors and services usage behind FinTech growth and adaption due to AWS include:  

Infrastructure to Deploy services 

For startups that wanted to enter the market or established businesses that were looking to migrate to the digital landscape, AWS provided a cloud infrastructure for a seamless transition. FinTech were able to launch and deploy their flagship services including online banking, digital wallets, online lending platforms, and even trading and investment options. It was possible only as AWS offered a full assisting cloud that eliminated the need to invest in any costly physical infrastructure. 

High Performance Scalability 

As the startups witnessed unprecedented growth, the ability to scale it became significant. AWS allowed the startups to scale their services which fluctuated drastically due to the growing demand. It offered various services to ensure an uninterrupted banking operation even during peak hours. Two services that startups adopted the most to scale their operations include Amazon EC2 and AWS Lambda. 

Cost Efficient Model 

During the pandemic, budget was usually tight for startups due to the uncertainty of their initial growth. Therefore, for them to be able to utilize cloud services, AWS provided the pay-as-you-go model where the businesses could pay only for the services they required. It was especially useful for the startups as they could access resources as their production demanded and budget grew which allowed them to purchase more services. This hand in hand growth is one of the main reasons why startups were able to stand up during Covid when even the biggest of businesses were unsure. 

Security Options 

As the digitization landscape grew, the online threats to the sensitized data also increased. Thus, security became a major concern especially for startups who had yet to gain credibility among their clients. To tackle this, AWS offered advanced cyber security options that presented multi layered encryption. The most common security services that AWS offers include AWS IAM and AWS Shield. 

Although AWS offers numerous other services, the stated features helped FinTech startups the most. They allowed FinTech to maintain seamless business continuity by facilitating remote and secure banking. 

Some challenges FinTech had to Face 

The path of growth during the Covid was not all flowery for FinTech. There were various obstacles they had to face to evolve. Their main competitors, i.e., traditional financial institutions, also attempted to digitize their services to compete with FinTech. This rivalry led to the segregation of the customer base especially those whose tendency leaned more towards the conventional banking services. 

Another major challenge was securing capital in the economic downturn. FinTech entrepreneurs found it harder to look for investors who could afford to invest in startups during the already bad economy.  

However, startups were able to stay strong in the growing market by effectively utilizing cloud computing services like AWS.  

To understand more, let's grow through the journey of Sarwa and CRED! Two FinTech startups that grew significantly after utilizing AWS. 

Sarwa is an online investment platform designed specifically for the young and busy people of the middle east. It was launched on AWS cloud while availing the various offered services. As Sarwa was dealing with customers’ sensitive financial data, it utilized the security options the most. 

Meanwhile, Cred is a reward-based credit card payment app. It was also launched on AWS virtual cloud for its secure and scalable technology. Furthermore, Amazon Linux is used to launch all CRED’s servers as it presents a high-performance environment for applications. 

Both these startups grew significantly in the past five years and their success can majorly be attributed to Amazon Web Services.  

It is right to conclude that AWS presented itself as the best assisting service in the significant growth of the FinTech industry, especially for startups that rose during the Covid-19. By enabling digital demands, it has played a considerable role in shaping the future of Fintech and undoubtedly, will continue to do so.