Finance is a dynamic industry. It is always changing. But the changes are often slow; that’s the reason most people can’t feel them. In this article, I’m going to discuss some of the changes that have taken place lately and are continuing to take place as I write this.
Finance is now “Fintech”
In a world that is more connected than ever before, technology is bound to take the drivers’ seat. Technology now dominates every sphere of our lives. Finance is no exception to this rule.
Hundreds of financial activities, which in the past used to be done manually, no longer require human involvement. “Fintech” – an umbrella term, loosely allude to all such technologies. As technology is penetrating more and more into finance, the term is becoming more contextual and colloquial. At one point, I believe, finance as we know will completely transform into fintech.
Don’t wait for that day if you want to simplify your financial life, and make it uncomplicated. Dig into fintech now because it is here to stay. Fintech has an extremely skewed demographic. Mostly young people are into it while old people can’t get the “tech” part. But don’t let that discourage you if you are old. The interest is an excellent resource. Use it to learn whatever you need to learn.
Transparency and consumer confidence
Take quick credit building strategies, for example. The belief that paying only the bare minimum every month is enough if you have outstanding debt on your credit card is widespread.
A survey done by creditcards.com reveals almost 30% American millennials believe that not paying the entire outstanding credit card debt is good for their credit score. It may have been true earlier but not anymore as only a handful of people use actual cash nowadays. Besides, the public debt is already through the roof.
It’s just an example but it illustrates how misleading and sometimes contradictory info can masquerade as sound advice. People need to know how to best organize their finances and separate bad advice from useful advice, which is why transparency is so important.
Transparency begets consumer confidence. When brands and public offices are transparent, consumers feel confident. Boosting consumer confidence and taking measures to increase transparency seem to be two critical challenges for financial establishment in 2020. It’s a change that’s taken place quietly; the sooner we pay attention to it, the better.
Concentration of financial services
Not sure if you’ve noticed it but the world of finance is becoming more and more centralized. Yes, startups are mushrooming in the finserv industry but the majority of those startups are not making past two years. The ones that have a promising product/service to offer are getting acquired by the giants.
On one hand, the centralization tendency is creating opportunities for you. On the other hand, it is ruining the balance in the market. Don’t be surprised if only a select number of companies start offering all financial services. Because that’s what the future could be like.
If the financial industry becomes even more centralized, prices of services will increase and you might have to pay more to get the same service you are getting now. This is bad news, I know. But on the upside, you can expect the whole financial world to be more integrated and that’s a good thing. Service providers merging platforms can offer a single-window to perform all kinds of necessary financial activities. Paying mortgage premium, utility bills, annual tax – everything would be simplified and streamlined. It will indeed be great.
Personal finance becoming automated
Managing expenses, paying bills, etc come under personal finance. “Personal finance” is among the most searched keywords on the Internet. Across the world, everybody is wondering how they can organize their finances for the better and looking for experts’ advice. Even a few years ago, the so-called experts held significant power over their decision making. But with automation taking over, these pundits are losing their seats.
A slew of apps are there to make your financial life easier and 100% stress-free. From financial feeds to expense tracking, automation is everywhere. All you need to do is download those apps, that’s all. You might still need expert opinion, but not regarding day-to-day money related stuff.
People used to visit advisors’ offices, even a decade ago, to know how much mortgage they’d have to pay annually. But now, thanks to mortgage calculator apps, they can get every necessary info sitting right on their couches.
What’s most important, in my opinion, is to be open to the change that’s affecting the world of finance. Understand that today’s practices will become obsolete tomorrow. You must be able to catch up with the latest happenings in finance and learn your lessons.