Advanced technology has successfully and quickly worked its way into our portfolios and (mobile) wallets. Given the excess of mobile banking services and as well as budgeting and investing applications, you likely have at least one financial tool at your fingertips right now. Indeed, financial technology is growing in many ways one could ever imagine. The rise of digital and automated money matters is a positive movement helping people improve their financial pictures.
Some financial technology acts as agent to help make investing more accessible. While you might think you need a fortune to invest, some applications allow you to get started with a little amount. Fintech can be empowering for women, most specifically. It also helps level the playing field. “There is a great deal of research that says women find that the traditional investing industry feels unwelcoming to them,” says Sallie Krawcheck, founder of digital financial adviser Ellevest, which focuses on serving female clients.
However, fintech also does have a downside.
First of all, there is always a great deal of risk when sharing your personal information, but it is actually necessary when using most technology services. If only people were more willing to accept spending a little more time verifying their identities when using certain financial services, for example, companies would be able to focus more on security rather than ease of use.
Ordinary people can start making that shift by being selective about what companies you work with and what financial apps you use. Before downloading a new app and trying a new service, you want to be sure you’re working with legitimate companies that prioritize your security.
Convenience in all sense can be a dilemma for fintech users in another way because when it’s easy to spend money, it is also easier to overspend it. But having an easy access to spending certainly doesn’t help people who may have trouble controlling their budgets.
Fintech, to some extent can also help provide information and even solutions, to some major yet personal finance problems people are struggling with. But there is also a risk: if people are financially illiterate, the attempt to use technology might not help. Technology is not a substitute for financial literacy; rather, it should be a complement. Now that we live in a digital world, it is even more important to be financially literate.