In today’s modern age, digital technology is at the forefront of every organisation’s operational processes, whether it’s manufacturing or construction. Over the past few years, digital technology has also been transforming the way the financial services industry operates.
From mobile wallets and digital currencies to online banking and investment options, digitisation is now imbued in every aspect of finances so much so that there’s an exclusive domain – the fintech space.
Financial technology or “fintech” in short is any disruptive technology-based business that caters to or competes against financial firms. It currently is one of the fastest growing sectors in the world with ever-increasing year-on-year investment.
In fact, investment in the fintech space has risen from USD100 million in 2008 to USD19 billion in 2015.
What Fintech can Do for Your Personal Finances
Fintech firms are showing no signs of slowing down in the personal finances sector. According to The Global Findex database, almost 70% of the global population of adults now has an account with either a mobile banking firm or a financial institution.
The options are seemingly endless for fintech in the personal finances sector. From tracking finances and comparing credit cards online to investing funds and learning about wealth management, there’s plenty that you could do with your mobile device.
Here are four of the most important areas in personal finance where new-age fintech companies are making a big difference:
When you receive your monthly pay, feeling the need to splurge is only natural. But, when you’re in debt, a budget to control needless cash outflow can be a great first step. If you’re not up to making a budget the traditional way, fintech apps like Mint and Goodbudget can lend a helping hand.
With these applications, you can track everything you spend and get a real-time assessment of where you stand financially. You’ll even be able to set aside money for specific purposes and get updates when you exceed any preset limit.
Being financially aware is one thing, but to get the best financial products and services, being financially literate is extremely important. Never mind if you don’t know the first thing about getting a credit card or refinancing your home loan.
Personal finance websites like BBazaar.my and NerdWallet can pretty much be defined as repositories of financial information. Spend a little time researching and you’ll have all the important tools you need to make informed financial decisions.
While making a budget is easy, sticking to it is the hard part. So, if you have trouble following your plan, try Acorns or Digit, fintech apps that help you with wealth management. When you use either of these apps, your income and spending pattern gets a closer look.
Based on how you spend, a small amount of money is credited automatically into a savings account. Money saved up can be used as emergency funds for that proverbial rainy day.
Ever thought a robot could advise you about investing your money and growing wealth? Fintech has made this possible with robo advisors. These digital investment management services are mostly easy to set up and low on fees making them ideal for small-scale investments.
Robo advisors like Wealthfront and Robinhood provide algorithm-based recommendations based on your investment preferences.
With the fintech revolution here to stay, it doesn’t mean that it’s the end of the road for traditional banks.
In fact, most start-ups in the financial sector are all about enhancing existing services by highlighting the growing need for convenience, speed, and inclusivity.