Impact of Covid-19 Pandemic on Financial Innovation, Cashless Society, and Cyber Risk

Abstract

The global pandemic, as an unprecedented event in the recent past, has significantly changed the modern world. Numerous companies and individuals have faced various challenges that are still present. The aim of this paper is to review the impact of pandemic on financial innovation, fintech companies, cryptocurrencies, the development of a cashless society, and cyber risk. It tests two already confirmed hypotheses: H1: COVID-19 pandemic has affected the development of financial innovations and cashless society; and H2: COVID-19 pandemic has led to increased cyber risk. The method applied is desk research, i.e. a review of the existing studies and their unification. The paper shows that fintech companies proved to have been resilient during the crisis since they have managed to change their business model and offer new products and services (financial innovations). It also indicates that it is obvious that the number of cashless transactions have increased due to the pandemic, but that it is still not reasonable to expect a completely cashless society in the near future. The paper highlights that cyber risks are on the rise owing to the growth of cashless transactions and digitalisation of businesses driven by the global pandemic.