New Zealand tech and fintech companies are feeling the threat of the coronavirus, as global financial markets plummet and people become worried for their financial security.
FintechNZ general manager James Brown says as the COVID-19 outbreak spreads into its third month, the virus is covering much of the world and things could get worse.
"I have spoken to a lot of New Zealand tech and fintech companies and people are definitely and rightly cautious," he says.
"Consumers and fintech markets are now waking up to the economic threat posed by COVID-19, particularly with no end in sight yet."
Global financial markets have plummeted in what could be similar to the Global Financial Crisis, with 60% of people across Asia are worried for their financial security, according to a new study.
London research data insight company Kantar has just produced a comprehensive report that showed more than a third of Asians feared COVID-19 could push economies to the brink of recession. Koreans are most concerned about their financial health (77%) and job losses (61 percent), the study found.
"People in the industry are wondering if the Reserve Bank should cut interest rates to boost confidence and lower the NZ dollar. Time will tell," says Brown.
"Here in New Zealand, we need to make sure we continue with the support for our small fintechs to help them potentially ride out this storm as they don't have large balance sheets like the incumbents who can make provisions to reduce cost and keep going," he says.
"People will be wondering what the government provision is for companies that were in the middle of launching in a new market but have put it on hold after spending millions of dollars. Do they have the capital reserve to put this off for months? What monetary value has the government set aside to help small businesses?
"Fintech is borderless and globally accessible from right here in New Zealand if we work with our global partners, regulators and governments, this could help boost the economy in these challenging times."
Brown says overseas, companies are telling investors that sales are slumping because of the outbreak; conferences and events have been cancelled and staff are being told not to travel. Organisers called off the annual global telecommunications trade show in Spain, the MWC in Barcelona.
Tech companies with direct exposure to China were the earliest to feel the effects. Apple has warned investors that the supply of iPhones would be hampered by the spread of the coronavirus. Microsoft depends on customers who install its Windows software on laptops and Surface tablets, and both of those hardware products are also being hammered by closings and slowdowns in China.
Employees at Amazons worldwide operations have been told not to travel domestically or internationally until further notice.
Countries such as Hong Kong are slowing down across the financial services sector and the G7 ministers are warning of an economic hit.
"But on the upside, we are likely to see Kiwi companies like Sylo providing more and more secure video and audio communications, which helps people working from home," Brown says.
"They are an example just how New Zealand can provide a platform which allows the world to communicate securely while the virus continues to spread and reduce human interaction around sensitive and delicate matters."