Technology is changing the way Americans view finances. Forty-four percent of Americans find managing or speaking about their money challenging. Of those consumers, 59 percent of them view financial management as an obligation but that is all changing. Digital payments are predicted to rapidly explode in the coming years, mobile apps are cementing their place and innovations continue to be vital in financial security and fraud reduction. New technological advances in the financial landscape have meant that finances continue to be transformed into a simpler, easier process. Take a look at some technological innovations in the world of money management, and how it is changing in the eyes of consumers.
Relieving The Cost Element
Thanks to innovations like roboadvisors and free to download money management apps, the cost of managing your finances is decreasing. Roboadvisors remove the middleman element while offering consumers cost-efficient investment advice at a time suitable to them. In 2017, assets managed by this technology crossed $222 billion and it showed no signs of slowing down. With a human advisor, investors can pay anywhere between 1 percent and 2 percent annually in management fees while robo advisors can charge around 0.36 percent annually. They are also widely available to everyone with an advisor aimed at every level of financial knowledge and appetite. This makes it suitable for every kind of consumer; from the wealthy and well versed, to the senior population looking to utilize automation to upgrade their financial admin.
The cost element doesn’t end there either. Americans shell out a staggering $329 each in bank fees each year, according to a report by BankFinder.com in 2017. In addition, banks pocketed over $15 billion in overdraft and check fees for that year. However, all of that is changing thanks to technology. Mobile apps allow financial management tasks to be done on the go and most banking institutions offer it for free (or a minimal one-off charge). In addition, the instant access that these apps provide allow for better monitoring of finances by Americans; reducing the chances of overdrafts or bounced checks. Instead of being consumed with overhead charges, a large percentage of consumers’ cash is put towards their goals; whether it is saving or investing. In short, technology enables better management of their money which includes reduced costs.
Improving Financial Education
The ease of access has also led to another positive change – improved financial education. Consumers are becoming smarter when it comes to their money and they are starting at an early age. LendEDU found that millennial Americans are putting away an average of $480 each month towards their retirement goals. A part of the shift is thanks to widespread financial education. From teenage years, Americans are more aware of financial options and able to access any information they need to understand their financial health. Guidance is readily available online if needed and introductions such as financial themed mobile games can help young individuals learn about money. Technology has also made the process of comparison easier. Now you are able to assess different financial products on the market and choose the ideal one for your individual situation.
Changing The Accountability
With the variety of money management tools available to consumers, opportunities to improve their accountability when it comes to money are increasing. Access to management tools have definitely improved; anyone with a smartphone can access information, advice or tools to help them with their financial concern ranging from debt management to the best savings account. In the recent Bankrate survey, it was revealed that almost two-thirds of smartphone users have at least one financial app installed on their phones. Budgeting has become a lot easier thanks to personal budgeting and advisory apps that link to bank accounts and display all financial obligations in one place. In 2018, 17 percent of consumers had at least one budgeting apps on their mobiles. Financial planning has improved as well; it is has been simplified so that even teenagers can plan towards their financial goals. This will continue to be the case in the future; distributed ledger technology powered by the blockchain revolution is expected to be introduced in the coming years.
There is no question that technology has changed the money management landscape. The world of cash payments is rapidly disappearing and the banking world is now largely digital. By 2020, the Fintech industry will have surpassed $46 billion and will continue to open new doors for consumers to improve the financial aspect of their lives. By the looks of it, the transformation is just beginning.