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fintech personal finance
19 Jul 2021

How Fintech is Improving Personal Finance for All

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Fintech is the latest obsession on Wall St as the technology, and financial industries collide. The transition is evident as some of the largest fintech companies have experienced significant growth in valuation.

In fact, the market caps of Square, Paypal, Visa, and Mastercard are worth over 1 trillion, where the big bank’s JPMorgan, Bank of America, Wells Fargo, Citigroup, Morgan Stanley, Goldman Sachs don’t even cross the trillion threshold. Fintech is changing how individuals approach personal finance, making it more accessible to everyone.

Keep reading to discover how financial technology is changing the lives of millions and what to expect going forward.

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More Convenient

Convenience is everything in this day in age with individuals looking for instant gratification. Fintech is about as convenient as it gets when it comes to personal finance.

With new technology, personal finance is becoming easier than ever to manage. It’s like having a bank and financial advisor in the palm of your hand that can be accessed at any time you need. Banking has never been easier with instant access to records on smartphones, and many even offer instant transactions.

Financial technology has also made it easier for individuals to apply for a loan. Fintech companies like Better Loan Blog have made it a very simple and straightforward process to apply for income-based loans, payday loans, and cash loans. Having access to these types of loans makes it easier for individuals to:

  • Catch up on bills
  • Pay off unexpected expenses
  • Or build credit

This technology has made it easier not only for consumers but for business loans and peer-to-peer lending.

Improved Customer Experience

It’s all about the experience now – having great customer service isn’t enough these days as consumers expect more from companies. According to research from PWC, over 30 percent of consumers reported that they would stop doing business with a brand they love after just one bad experience.

Naturally, technology has evolved over the years to fit consumers’ needs – which is convenience and ease of usage. Fintech companies have capitalized on this, making the user experience a major priority.

By simply logging on to a digital banking app, users can now see a visual history of their finances, showing if their savings are where they need to be or not. And it’s not only for banks, it goes for investors as well – brokers are pouring resources into building investing and trading software that makes it easier for people to start investing.

For example, Robinhood is an investing and trading app free of commissions, a first in the industry. Robinhood’s business model has forced other “major players” in the investment industry to change their methods, like Charles Schwab and TD Ameritrade.

Robinhood has experienced unprecedented growth over the past several years, surpassing the 13 million mark for active users just this year. Even after the app has crashed several times, retail traders continue to trade on it, showing how resilient financial technology can be.

Part of the reason why users continue to use the app is because of the app’s simplistic design and user interface. Some users have even compared using the app to playing a video game due to their effects when depositing money and making trades.

More Security

Other people’s money is not something to mess around with, and fintech companies have put extra emphasis on that idea. It may seem like a scary idea to send money online across the globe, but consumers will have added security with the practices companies have in place.

To take advantage of the increased security, users must be willing to utilize the techniques and implement them. For example, most financial institutions will provide two-step authentication for their users. However, if the customer isn’t willing to set it up for themselves, they will be missing out on that added layer of security.

Data encryption is another type of technology that has experienced significant growth. With this technology, people can send information securely to other users and not worry about others reading it. The process works by translating information into unreadable data known as ciphertext, and only the person receiving the information can view it.

With mobile payments, data security is more important than ever as so much information is being processed every moment. Luckily, fintech innovations have made the process simpler and more secure.

Lower Costs

One of the major benefits of Fintech is the ability to save on costs. As technology advances and is developed, it simplifies processes making it easier for companies to complete certain tasks. These cost-saving measures can then be passed on to the consumer, benefiting both the company and customers.

Since financial technology companies can save on costs where big banks cannot, such as brick and mortar locations, they can offer lower-priced products. Not only that, fintech companies are lowering the costs of overseas transactions to gain market share on the established banks and appeal more to travelers.

Increased Access

It wasn’t too long ago when you were left behind when it came to personal finances if you didn’t have a certain amount of money or a certain status.

Today, things are different with technology closing the gap and giving people opportunities they wouldn’t have access to before. For example, Robo-advisors are a cost-effective way of planning your finances and generating a budget to help get your finances in order. These financial instruments allow individuals to invest in financial markets without having a minimum balance, allowing them to still grow their wealth.

Robo-advisors can also give financial advice to those who can’t afford to hire a financial advisor or don’t want to spend the extra money on one.

The Next Fintech Company for Your Personal Finances?

Personal finance used to be a term reserved for those who could afford it – fintech has closed the gap and made it easier for everyone to take control and better their situations. Financial technology will continue to develop and make people’s lives easier, it’s up to you to take advantage of it.

The disruptive technology has already impacted millions of lives and is expected to only accelerate in the coming years. To learn more about Fintech, check out our personal finance learning center for more information.