Tuesday, December 15, 2015

6 Ways Technology is Transforming Personal Finance

 Jonah Engler - Personal Finance Technology

The advent of the highly efficient mobile Web is transforming the way people approach personal finance and conduct transactions. To this effect, the impact of technology on personal finance can be described as making things faster, simpler and more affordable to accomplish. The following six examples of technology augmenting personal finance are among the most conspicuous these days.

Infographic by Jonah Engler - Personal Finance


1 – Funds transfer: The concept of being able to instantly send money to others via email dates back to the early days of PayPal in the late 20th century. Since then, the electronic funds transfer space has become crowded with no shortage of PayPal competitors. These days, companies from Apple to Google and from Amazon to Wal-Mart are vying to get a share of this lucrative market, which at one point was dominated by retail banks and wire transmitters such as Western Union. Although this has become a highly rivalrous and fragmented industry, consumers have benefited from the competition in term of costs and efficiency.

2 – Retail payments: The same players that wish to dominate electronic funds transfer want to rule the retail payments industry as well. In 2016, the market leaders in this space will continue to experiment with the mobile wallet concept, whereby consumers will physically use their smartphones to settle point-of-sale transactions.

3 – Online banking: This is an industry that has been thoroughly transformed by technology, oversight, regulation, and compliance. Personal banking as we knew it in the 20th century is no longer a popular concept. Account holders are not interested in overzealous credit checks and intrusive Know-Your-Customer measures; instead, what people want from their banks is being able to easily open accounts that they can access through debit cards and smartphones.

4 – Tracking spending and budgeting: A feature that is often requested by smartphone users interested in mobile banking is whether they can visually track their expenses and set their budgets. In the U.S and Canada, this often means whether a financial institution is supported by Mint.com.

5 – Mobile investing: Being able to manage an investment portfolio from a smartphone can be a double-edged sword. On one hand, mobile apps that allow access to securities exchanges are certainly neat ideas in terms of lowering barriers to entry; on the other hand, day trading is not an endeavor for everyone who owns a smartphone.

6 – Comprehensive mobile financial services: Some demanding consumers would like to see all the features and services above rolled into a single mobile app, and some retail investment brokerage firms are beginning to offer such a solution for preferred clients.

Jonah Engler is an entrepreneur from NYC.

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