Published on September 18th, 2019 | by Sunit Nandi0
Fintech & the Future of Financial Management
The creation and innovation of financial technology, or fintech, has revolutionized how consumers allocate and spend money. Spanning many industries, from crowdfunding to car insurance, this tech has given users alternatives to physical businesses and has made it possible for people all over the world to communicate at the touch of a button.
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While many fintech offerings, such as online banking, have been around for a while, the advancements of blockchain and other technologies are yielding some spectacular products that are getting a lot of people really excited. Here is a look at what fintech is doing for us now and what we may see in the future:
The emergence of blockchain technology is changing the way banks and accounting firms do business. Originally designed for cryptocurrencies, blockchain is a connection of electronic “blocks” that hold information which could include contracts, trades, bank transactions, and more.
It is considered to be highly secure because it has a digital signature, it is encrypted, and credentials cannot be falsified or corrupted. Since the data is all interconnected, the old need to be read before new blocks can be made. This tech is so secure that it is also used for the protection of health reports, educational documents, and voting records.
There are many other benefits to blockchain technology as well. Fintech can be used at almost any time and is not subject to the restricted availability of brick-and-mortar banks. When used along with fintech, blockchain creates faster transactions at reduced costs. In fact, blockchain could take the place of many financial institutions as it continues to evolve and more people utilize it via mobile devices.
Consumers want to get the most out of their hard-earned money, and when too many banks charge numerous fees just for swiping a card or having insufficient funds, they may turn to fintech and blockchain. With such technology, the consumer knows how much money they have and that it will arrive at its destination within minutes.
A potential lack of fees may also make banking more inclusive to those who don’t have the funds to open a traditional bank account, or even those who may have a distrust of banks. Individuals who do have their reserves about big banks can also rest assured that the money in their fintech blockchain apps is extra secure.
Remittance and Fintech Help the Global Market
Remittance, or the transfer of money from one place to another, usually by a foreign worker to the country they call home, has been around for many years, but with fintech, it is becoming much more effective. For the longest time, migrants who wanted to send money had to go through the big banks — if they even had a bank in the first place. Again, they were hassled with fees, which essentially reduced some of the transferred funds that their families need to survive. Now, with fintech, they can transfer that money without the hassle.
In addition to the ease of use, there are many other benefits of remittance apps. For one, with less overhead, remittance transfers via fintech can be sent with better exchange rates. Plus users have their choice of payment methods, whether it be ACH, PayPal, or Apple Pay. Users can also avoid the time wasted filling out documents. With everything at their fingertips, they know exactly where their transactions stand. Best of all, when it is easier to send money all over the world, it bodes well for positive global commerce.
This remittance technology is not just a pipe dream, either. Currently, there are several startups with apps that make the process easy to understand and utilize, and several of them provide support for over 150 countries.
A Key to Easier Investing
Everyone wants to invest in their future, and many consider putting some of their money in the stock market. However, even for savvy consumers, the stock market can be daunting and confusing. To have maximum success in the stock market, you need to know about markets and trends. Often, the best way to go is with a financial advisor. However, not everyone feels comfortable talking to someone, or they don’t have the money to pay for such a service. Once again, fintech can help.
The newest advancement comes in the form of robo-advisors that use computer algorithms to manage your portfolio by looking at the money invested and how to get you the maximum gains. While the computer is mostly in control of your portfolio, human advisors are always available to answer questions and check the work when needed. There are currently several robo-advisors available to the public. While there can be minimum investment amounts, there is a robo-advisor for everyone, regardless of how much they have to invest.
Those who are testing the waters or have less to spend often try the popular robo-advisor at Acorns, which encourages you to invest your “spare change” and has monthly fees for as little as $3. Those more knowledgeable about the process that are just looking for some supplemental advice can turn to a service such as FutureAdvisor, which offers everything from asset planning to tax loss harvesting, but does also require a minimum balance of $10,000. These programs are incredible fintech advancements that show just how powerful and varied this technology can be.
In this world, money isn’t everything, but it sure makes things a bit easier. When we successfully marry finance and technology, we provide a more fruitful and secure future for everyone.