The rise of Paris Region’s Financial Services ecosystem above COVID-19

In the context of the current pandemic, insurers have done their best to support their customers navigate the crisis with as little damage as possible. They hope to mobilize €400 million to increase the solidarity fund in favor of the very small companies and the self-employed and pledged €500 million in commercial discounts.

The financial sector demonstrates a strong commitment to help

A good example of the Financial sector’s dedication to help has been seen among many companies such as Maif and Matmut, two French insurance companies, which announced the redistribution to clients of the vehicle insurance profits made since the beginning of quarantine. As the number of car claims dramatically dropped while people stayed indoors, the decrease in traffic accidents will allow the insurers to hand out respectively €100 and €50 million in rebates.

AXA, for its part, announced that it will redistribute more than €200 million to its customers in total. The French insurance heavyweight promises to reimburse 2 months of premiums to professionals and companies that are closed due to the lockdown.

Insurers are also working on a €1 billion investment plan that will directly benefit companies in the healthcare industry. The Caisse des Dépots, a French public financial institution, along with the insurers, will rely on existing funds to be faster in investing in debt and/or capital in listed and unlisted SMEs and midcaps. CNP Assurances intends to commit several hundred million euros to the investment program under development.

The banks have been very mobilized since the beginning of the crisis. By mid-March, on the eve of the lockdown announcements, retail banks had put in place a six-month moratorium on the repayment of loans to businesses, at no cost and without interest. They are also mobilized to grant state-guaranteed loans (PGE), a mechanism that allows companies to obtain amounts of up to 25% of their annual turnover. To date, around 150,000 of them have obtained a financing agreement of this type for a total amount of €22 billion.

In the unprecedented context of the health crisis caused by COVID-19, the payment company PayPlug offers its online payment service free of charge to doctors. The situation only accelerated the adoption of remote banking solutions, a subject on which  retail bankers have been very agile.

Paris-based VCs managed to support their investments while tackling new projects. They are now focusing on technologies that are useful during the confinement (Edtech, gaming, cybersecurity, etc.), those that will prevent a new crisis (Medtech, supply chain) and those that will enable businesses and individuals to overcome the effects of the crisis (Fintech, Foodtech…).

During this exceptional situation, while teachers and their students are confined, Banque Populaire renews free access for its customers to its website that offers support and books for download to children from first grade to high-school. The website was also updated to make it easier to use for families during this period: www.bibliothequedelareussite.fr.

Financial cluster and accelerators launch calls for applications to fight COVID-19

Finance Innovation is the vibrant fintech cluster based in Paris, boasting +500 members. On April 15, they closed their 11th call for projects targeting innovative fintechs. A new call is expected mid-July 2020.

In the meantime, they are backing several of their members’ initiatives. For example, a group of start-ups is teaming up to help entrepreneurs cope with their cash flow: G-Collect is leading this initiative alongside companies such as Astonitf, Factomos, Libeo and Streammind.

Among other initiatives:

  • Village by CA Paris, the Credit Agricole accelerator, launched a call for project for impact startups including fintechs.
  • Willa also initiated “Willa Women in fintech”, a call for projects looking for female entrepreneurs and talents.
  • Banque Populaire and Maddyness are teaming up to launch the 3rd edition of Prix Next Innov, a challenge offering prize money and a high visibility package for scaleups, including fintechs. The application period is extended until May 15th.

Towards a renewed and sustainable finance

Betting on an economic future that is more sustainable, fairer and more resilient after the crisis is the ambition of reCOVery, a collaborative initiative created by Fabernovel  and Mirova, an asset manager dedicated to sustainable investment. Several companies, financial players and other business associations have already joined a 31-day conversation which aims at helping the emergence of innovative solutions.  A web platform hosts for a month several challenges to feed the debate and consolidate the proposals of economic players.

An innovative and positive reaction

Through this challenge, the Paris Region financial ecosystem remains strong and innovative. As numerous initiatives emerge to take care of the current situation, players are anticipating on the ways they can make it even better, and more sustainable.

The whole sector is fully mobilized and determined to prepare for the economic recovery after the lockdown.

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