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Tags: personalfinance | technology | onlinebanking

You Can Bank on Tech Transforming Personal Finance

You Can Bank on Tech Transforming Personal Finance
(Dan Bar/Dreamstime)

Larry Alton By Monday, 16 July 2018 04:57 PM EDT Current | Bio | Archive

The economy is at its strongest point in well over a decade. Many people are finally starting to recover from the recent recession. As part of this recovery, personal finance has become a much more important topic.

Big things are happening in this niche and technology is playing a catalytic role.

Online Banking

If you’re over the age of 30, you have at least some experience standing in long bank lines, sitting at drive-thru windows waiting on tellers to cash checks, or sitting down with a banker to discuss loan products in person. But talk to most younger millennials today, and they hardly know what the inside of a bank looks like.

Online banking has been around for years, but it’s now considered the norm. Virtually every bank and credit union (small or large) has a mobile app or website that allows clients to deposit checks, transfer money, and apply for loan products. The result is less of a need for physical banks.

These days, there are even online-only banks. These include big names like Ally Bank, Discover Bank, and Spark Business.

DIY Taxes and Investing

Tax season is stressful for everyone, but technology is making the process of filing much less cumbersome. This is thanks in large part to the growth in free tax software solutions like TurboTax, H&R Block, TaxSlayer, and TaxAct. Even the IRS has a free program that helps taxpayers without any additional charges.

The same can be said of investing.

Whereas you once had to hire a financial advisor or investing professional to walk you through the best investments, there are a number of online solutions and automated tools that make suggestions based on an individual’s specific needs, risk level, and expectations.

Sound Mind Investing is one helpful tool that’s been around for years.

It’ll also be interesting to keep an eye on algorithmic trading, which is starting to gain some steam and become more popular among mainstream investors. Also known as algo trading, these systems use advanced algorithms to pick stocks and funds — often beating out average market returns.

"If our model is successful there will be no need for hedge funds any more," says Martin Froehler, the creator of Quantiacs, one of several online platforms for DIY algo traders. “A smart guy with a laptop will be able to start his own hedge fund. It will be very challenging to the big incumbents. A very simple idea can prove very powerful."

The Gig Economy

From the income producing side of personal finance, the gig economy continues to revolutionize the way in which money is made. Savvy individuals are tapping into it using tools like Uber, Lyft, Airbnb, Upwork, Fiverr, and Etsy to supplement or replace their primary income with flexible gigs and services. It’s a game-changer.

The gig economy is made possible by mobile tools — predominantly apps — that give people the ability to remotely reach a large customer base without any need for extensive marketing and advertising. As these tools scale, so will the industry.

According to research by Intuit and Emergent Research, advances in new technology will continue to push the gig economy forward over the next few years. By 2021, there will be an estimated 9.2 million Americans working "on-demand" jobs — a number that’s up 4.4 million from last year.

Peer to Peer Transactions

For decades, one of the biggest struggles in the world of personal finance has been the challenge of processing payments between two private parties. In other words, how does a group of eight people easily split a check at a restaurant?

Or, how do you securely send money to your son who is overseas for a month? While cash and checks work, they aren’t always fast or convenient.

Wire transfers are secure, but can be costly. 

Over the past few years, companies like Venmo have emerged to fill this void.

By simply linking up a credit or debit card, users can instantly send cash to other users without fees, waiting, or security risk. The result is simple, seamless peer-to-peer transactions that make it easy to share money whenever and wherever.

On a related note, there’s also been a rise in peer-to-peer lending over the past few years. Platforms like LendingClub, Propser, Fundrise, and Funding Circle (to name just a few) let individuals lend money to businesses and projects. This makes it easier for businesses that otherwise wouldn’t have access to banks to receive small, short-term loans.

Technology: An Agent for Positive Change

Technology often gets a bad rap for taking away jobs or automating processes that need human interaction, but the truth is that technology can be an agent for positive change in areas like personal finance.

As these technologies show, good things are coming down the pipeline.

Don’t look away. You might miss something!

Larry Alton is a professional blogger, writer, and researcher. A graduate of Iowa State University, he's now a full-time freelance writer and business consultant. Currently, Larry writes for Entrepreneur.com, Inc.com, and Forbes.com, among others. In addition to journalism, technical writing and in-depth research, he’s also active in his community and spends weekends volunteering with a local non-profit literacy organization and rock climbing. Follow him on Twitter (@LarryAlton3), at LinkedIn.com/in/larryalton, and on his website, LarryAlton.com. To read more of his reports — Click Here Now.

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Personal finance has become a much more important topic. Big things are happening in this niche and technology is playing a catalytic role.
personalfinance, technology, onlinebanking
Monday, 16 July 2018 04:57 PM
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