How Technology Is Changing Finance

How Technology Is Changing Finance

Technology has impacted our lives in countless ways. Digital tech impacts almost every aspect of daily life. From how we communicate to the products we use to how we access information, technology has made things faster, more efficient, and more readily available.

Technology has also impacted personal finances. It’s changed how we pay for items, how we budget, and even how we get paid. The days of paying in cash or having to go the bank to deposit a check are long gone! Today your money and everything associated with your personal finances are all stored in the cloud and can be accessed from anywhere at any time.

While technology has already changed finance, it will continue to impact how we manage our money for years to come. Here’s how.

Availability of Financial Advice

There’s tons of information on the internet, but some data is best to get from the mouth of a professional. If you want to figure out ways to best meet your financial goals or if you’re interested in getting into investing, you likely want to work with someone who makes a living knowing such information.

But the traditional means of getting financial advice was somewhat limited. You usually had to go to a local bank to speak to a professional, and your options for choosing an advisor were quite limited.

These days you can find a financial advisor without ever leaving your home. There are tons of websites and online options that allow you to find advisors in your area. For example, you can compare the 5 best financial advisors on the Careful Cents site.

Growing Number of Financial Management Apps

Thanks to the ever-increasing popularity of mobile apps and on-the-go behavior, financial management apps are more readily available than ever before. These days there are all sorts of financial apps, including those designed for:

• Budgeting
• Investing in stocks
• Saving money

There are even apps that allow you to earn cashback and other rewards just for buying products that you need!

With the growing number of financial management apps, you can manage your money with a few clicks, taps, and swipes. What’s even more beneficial is that many of these apps are free to download and use.

New Payment Options

Decades ago, cash was the only way to pay for items, and then came along credit and debit cards. While it’s most common for consumers to pay for items using some form of plastic payment, one day mobile payments may become the most popular option. In 2018 it was predicted that 55 million people (around 20% of the population), would use mobile payments. Whether you’re running a clothing store in Atlanta or a record store on the west coast, mobile payments are quickly becoming the norm.

There are already all sorts of mobile payment options including Apple Pay, Samsung Pay, and Google Pay. Mobile payment is extremely fast and convenient. To use a mobile payment, all you need is your phone! For example, Apple Pay works by using near-field communication chips that are embedded into the phone. You then hold your device near an in-store card reader and the transaction is complete!

These one-touch payment options are especially convenient, allowing consumers to buy an item more quickly than ever before.

Big Data & Your Credit Score

Your credit score has a huge impact on your financial standing. In fact, this number alone impacts living and job opportunities, whether you’re approved for a loan, and the interest rates you can expect to pay.

There are many factors that go into determining your credit score including payment history, length of credit history, credit utilization, and recent credit activity. Each of the credit bureaus uses a complex algorithm to set your credit score.

In the years to come, as a growing amount of big data is readily available, consumers can expect these complex algorithms to become even more sophisticated. This means that in the future, your purchasing decisions may have an even bigger impact on your credit standing.

Increased Security Using Blockchain

Economic crime is more common than ever before. Chances are that you or someone you know has been the victim of identity theft or fraud. As a way to provide better protection for the financial industry as a whole, there’s a push for using blockchain technology to better protect consumer data.

Blockchain technology is already widely used in many industries, including cryptocurrency. Bitcoin and others use blockchain in order to create a digital safe haven that is extremely secure.

While nothing is 100% secure, blockchain technology provides a much safer way to conduct digital exchanges. One day blockchain may be the go-to way to conduct all virtual transactions, ensuring they’re secure and impregnable from hackers or online thieves.

Conclusion

It’s no surprise that technology has and will continue to change how we manage our finances. From mobile payment to blockchain to online financial advisors, there are all sorts of ways that digital technology will impact how we manage our money and how we pay for products.