Technology has changed our lives in a significant way over the last few decades. One industry that’s been impacted the most is the financial industry. The rise of the internet and technology has made almost every aspect of our lives easier, including how we manage our finances and how financial institutions conduct business. Here’s how technology has altered the finance world forever.
Decentralized Banking
Banks and other financial institutions have been in charge of money since what seems like the beginning of time. Whoever is in charge of money typically controls the entire world. However, that’s beginning to shift. Once the kinks of blockchain are figured out, we can expect to see dramatic changes worldwide. The decentralized nature of blockchain means it will be easier for consumers to send each other money and buy houses without consulting their banks. This will make your savings more secure.
Investing
Investing your money always carries a certain amount of risk. However, risks are becoming more manageable because of technology. With automated trading software and apps, investors can easily monitor investments, develop better strategies, and use algorithms. These technologies make investing more advanced for both companies and individuals while opening up industries that were closed off in the past.
Private Lending
Banks once ruled the world. If someone wanted a loan like a mortgage, they had to convince the bank they were a reliable person who could pay back the loan. Technology has made it so banks no longer have all the power. People have more options than ever when it comes to receiving money. One example is peer-to-peer (P2P) lending, which connects private lenders with consumers who want loans. Without fintech, we would be living in a very different world.
Tax Planning
Thanks to technology, whether you’re a regular employee or a business owner, your tax season is much less stressful than it used to be. Tax software is available online and through apps that can help you automate the process of filling out a tax return using your pay stubs and W4. The process is similar for business owners, although slightly more complicated. However, if you have the proper documents when filing your taxes, you’ll have a more straightforward process.
Tax software is even more beneficial for small business owners because it can calculate quarterly taxes based on profit and loss statements and cover payroll taxes.
End of Life Planning
End-of-life planning is something many people forget is part of their financial plan. Creating your estate plan or will no longer has to be complicated. You don’t even have to see an attorney in person. Instead, you can draft an online will that ensures all your wants and needs are handled after you pass away.
Customer Service
As FinTech continues to transform the financial world, it drastically improves others, such as customer service. Customer service is an indispensable factor of any business. In the past financial service providers would have staff handle customer support and provide solutions to problems. Thanks to technology, customers no longer have to call banks, other financial institutions or visit their location in person.
Now, with the use of chatbots, online chats, social media, and more, customers can have their problems solved faster than ever. Chatbots are becoming increasingly popular in the financial industry because they can help customers through issues in the comfort of their homes. Even though it lacks the human element, it allows financial institutions to provide customer service to more people at once.
Online Banking
Banks have developed apps to provide consumers with the ultimate level of convenience in managing their finances. If it weren’t for these online banking solutions, you would have to call your bank every single day to know your account balances.
Online Bill Pay
Being able to pay your bills online not only provides you with convenience but allows you to ensure you pay your bills on time every single month without missing a payment. As you know, missed payments can affect your credit score and put you into debt. When you have a bill due, you’ll receive an email informing you to pay your bill online. You can also set up automatic payments every month, which makes it impossible to miss a payment. Overall, be aware of your checking account and make sure it has enough money in it to cover your recurring bills.
Earning an Income
Many people have second jobs and earn money with a side hustle to supplement their income. Thanks to technology, you can begin earning your income online with an online business. There are plenty of options for making money online, from starting your own Etsy shop to earning rewards through surveys on a website like Swagbucks.
Getting Paid
Does your employer give you a paper check? In some industries, you cannot set up direct deposits. However, most enterprises are allowed to pay employees with a direct deposit. This means your paycheck will hit your checking account much faster than if your employer-issued paper checks and you have to deposit them at the bank.
Let’s face it; waiting for a check to come in the mail means you might have to wait weeks to get paid. For side hustles, you can ask customers and clients to pay you via PayPal or another online payment solution, which makes accepting payments easier.
Technology and the Ever-Evolving Financial Landscape
All types of businesses have been changing since the dot com boom, and there’s no end to this in the future. As technology advances, financial institutions will need to keep up to provide their customers with quality support and convenient solutions.
The financial industry is just one of many that are seeing a growth of innovations. As FinTech becomes a more common term, it will continue to change the industry as we know it. While nobody can predict the future, technology will continue to impact our financial lives.
