New Delhi: Those looking to enter the digital banking space in Asia may find it harder to do so now as some opportunities may have been lost in the coronavirus pandemic, according to Fitch Ratings.
The pandemic has hit the global economy hard and is disproportionately affecting people and businesses with a “weaker” borrower profile — the customer segment targeted by many aspiring digital banks, said Tamma Febrian, associate director for financial institutions at the ratings agency.
“A lot of them are citing the unbanked and the underserved segment as their main target segment, and we think that the crisis currently will disproportionately affect them,” Febrian told CNBC’s “Squawk Box Asia” on Friday.
“What this means is that, technically, you’re talking about … potential reduced opportunities for profitable lending,” he added.
In addition, social-distancing measures and lockdowns around the world to slow the virus spread have forced many incumbent banks to improve their digital offerings, said Febrian. That could potentially close off openings for new entrants into the market, he explained.
