The tech boom of the 21st century has brought with it a number of exciting changes to the way we as a society, and as individuals, spend and manage our money. The ever-increasing power and speed of computer processors has revolutionized how big banks and financial institutions manage their own investments and handle your money at the individual level.
Not only has the speed in which financial transactions can be executed grown, but also the ways in which we interact with our own money while interfacing with banks, creditors, and retailers has sped up and changed dramatically in recent years. From personal budgeting apps and tools for managing your debt, like a debt snowball calculator, to mobile banking and on-the-go investing, the personal finance landscape is constantly evolving.
Gone are the days of needing to deposit checks in person (and in many ways, gone are the days of checks entirely, thanks to the power of direct deposit and mobile payment services like PayPal and Venmo). Mobile banking ‒ and the perks that come with it, like remote mobile check deposits ‒ are not only evidence of an increase in raw computing power, but also showcase advances in cybersecurity and serve as a testament to just how far cell phone cameras have come in terms of definition. Online banking also grants users the freedom to access account statements, credit reports, and transaction histories with the click of a button.
It’s no longer necessary to wait for The Evening Post to learn the day’s closing stock market numbers. While much of this exchange of data takes place through smartphones ‒ only about 15% of the U.S. population doesn’t own one ‒ the stream of information doesn’t end there. If you’re reading this, then you’re likely part of the 93% of American adults who use the internet , and thus contributing to the fact that you don’t need an expensive cell phone to take part in these revolutionary shifts in personal finance. That’s the beauty of it: there are now a multitude of ways to access and interact with your money. Let’s take a look at some of these personal finance tech innovations.
5 tech innovations in the personal finance world
Digital banking
Digital banking is attempting to reimagine banking from the ground up. Just like online retailers, online-only banks like Chime, Current, and MoCaFi are shedding the brick-and-mortar storefronts of traditional banks and aiming to be more inclusive.
While some have set their sights on teens opening their first accounts, and others are meant to function as an alternative for low-income or minority households in neighborhoods with historically less access to traditional banks, these “new banks” offer attractive perks like low- or no-fee checking accounts, small cash advances, overdraft protection, and easier access to lines of credit.
Making your money work for you
Many of these advances in fintech seek to help make your money work for you. Platforms like Esusu allow renters to report rent payments to credit bureaus to improve their credit scores. The relationship with a service like this one is a two-way street that renters and landlords can ride together: Property managers are willing to foot the bill for such a service because tenants are more likely to make payments on time when credit bureaus are involved.
Others, like Greenlight, a subscription-based budgeting app, seek to educate a younger audience on proper money management techniques. They recently partnered with JPMorgan to launch a sort of junior stock market practice app, allowing users to buy fractional shares to learn the ins and outs of investing.
Automation
I’d be remiss if I neglected to mention the importance of automation. We’re not exactly talking about an assembly line, but rather personal finance technology’s ability to automate and simplify financial responsibilities for you.
Automatic withdrawals for subscription services and other such autopay features have been widely available for some time. It’s likely that commonly-recurring bills like your car insurance premium, your minimum credit card balance, and maybe even your student loan payments are set to be automatically withdrawn from your checking account each month.
While getting hit with a bunch of payments at the beginning of every month might not feel great, there is something to be said about the importance of such features. Autopay simplifies your finances, which ultimately can help you save money by avoiding late fees.
Buy now, pay later services
Another industry that exploded shortly after the pandemic is that of buy now, pay later (BNPL) services. While some online retailers like Amazon offer their own built-in BNPL plans, the unprecedented surge in online shopping spurred on by the pandemic ushered in an entire industry of third-party postpaid services.
Though BNPL services often are demonized by those disseminating financial advice, there is no denying that they can have a transformative effect on those who opt to use them. Services like Klarna, a Swedish startup, allow online shoppers to opt in to postpaid services for just about any online retailer.
Brokerage apps
Remember at the beginning of 2021 when it felt like everyone couldn’t stop talking about GameStop, Robinhood, and sticking it to hedge funds? Brokerage apps like Robinhood, as well as investing platforms from more traditional institutions like TD Ameritrade, Fidelity, and E*Trade, have been around for a number of years, but saw a huge surge in popularity following the in early 2021.
Speed, ease of execution, and access have been a common thread here, and the rise in popularity of retail investment apps are the ultimate culmination of these things. Because we have nearly-unfettered access to all of the information required to make investment decisions, as well as quick and easy access to a means to execute these trades, the stock market feels a little less intimidating.
Being a trader no longer means you need to be some guy in a suit in an office on Wall Street ‒ anyone can do it, which is kind of what a free market is all about. Technology has simply enabled us to be able to do so from the comfort of our own homes.
John DeGregorio
John is a finance writer based in Brooklyn, NY. He studied Journalism & Media at Rutgers University.
Source:Plato Data Intelligence
