Modern technology is steadily making its way into our mobile wallets and investment portfolios. With so many investing, budgeting, and mobile banking apps available, you probably know how to use at least one financial tool. According to a recent KPMG research, the financial technology business is expanding at a strong clip, with 31 billion spent in the sector in 2017.
Automating and digitizing financial processes might be seen as a good thing since it helps people with their daily financial tasks. “Financial technology is about making the banking system work for you and assisting customers in leading easier lives,” stated Jason Raznick, the creator of Benzinga, a financial news site that honors innovation in the sector with a worldwide fintech award.
Easier investing
Financial technology facilitates greater accessibility to investment for individuals from diverse social backgrounds. Despite the widespread misconception that investing requires a large sum of money, you may start with as little as $5 using some applications like Acorns, Stash, and Robinhood. For instance, all you have to do to use Acorns is connect your account to your bank account.
The app rounds up the transaction each time you swipe your card, transferring your change into a brokerage account that is allocated to specific exchange-traded funds. According to co-founder Jeff Cruttenden of Acorns, “With Acorns, we did not convince anyone that they should invest or save because often, everyone knows they should, and it includes personal decision making.” He went on to say that his app streamlines the procedure and gives users a way to integrate their investing choices with their daily activities.
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Problem-solving and empowering
According to GFLEC creator Annamaria Lusardi, “financial technology can help to give information and solutions to personal financial problems in many areas.” Fintech may also be empowering since technology helps level the playing field, which is especially beneficial for women. According to Sallie Krawcheck, the founder of Ellevest, “a lot of research shows that women find the traditional investment setting unwelcoming.”
Working with a robot-adviser, however, or any other technology-based tool, is more approachable and offers a foundation for more straightforward entry into the field. Financial technology, according to Krawcheck, helps those who might be afraid since it allows them to research the investing world at their own pace and convenience. Fintech apps are also less expensive than traditional banks and brokerage firms, which is a factor that attracts newer and environmentally conscious investors in particular.
Since technology has significantly changed many elements of our life, it is not surprising that it also influences the creation, management, sharing, spending, and creation of money in the modern world. New financial technology companies don’t have to match massive organizations in terms of scale and offerings thanks to ongoing innovation. They can provide distinctive and focused services at more affordable prices, which is a change that is assisting in the industry’s transformation to include small investors. Be cautious and make sure to verify the legitimacy of the company or app you choose to work with. Before overindulging, Raznick advises checking things out with a little financial commitment and using recommendations from friends. learn more
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