How Technology Has Evolved Our Outlook When It Comes To Money
The way we live is constantly evolving, thanks to technology. It is changing the way we build our homes, the way we stay informed with current events and how we connect with friends and family. While it doesn’t take a hard look to identify the changes that technology has spurred in different parts of our lives, what about our financial lives? Has technology changed the way consumers view money? The rise of financial technology in money management and other parts of our financial lives has changed not just the way things are done, but our approach to money. Check out some of the major ways our financial view has evolved over the decades, thanks to innovation.
Changing Our View Of Saving
One large aspect that has changed thanks to technology is connectivity, and with it, so have the saving options. Traditional savings accounts are no longer the only way money is being put away for the future. The options for saving have expanded drastically. The market has opened up to include international banks, which mean international savings and transfer of fund between countries now takes minutes.
It has also allowed consumers to take advantage of better interest rates offered, since technology enables easy comparison of returns for savings. Interestingly, this has not spurred Americans to save. One in four Americans admit to having no emergency funds put away, and one in three of them have less than $5,000 saved for retirement. Confidence in borrowing has risen spurring a preference to spend instead of saving.
Borrowing Habits Have Changed
The shift to online borrowing has been noticeable in the last decade. Brick and mortar financial institutions are no longer a staple, as most transactions are now done online. The rise of the fintech industry provided the opening for lenders and credit institutions to embrace the digital way of borrowing. There are now more financing options tailored to civil servants, women and even those with poor credit score. As the clash between banks and digital lenders continue, customer service has also seen a shift, with consumers preferring the instant access and decisions that online lenders can offer.
Technology has also made borrowing a more detailed process, with the access to credit histories and reports. This allows for more informed decisions and smarter borrowing on the part of the consumers. It does not, however, mean that the process has been elongated. In fact, technology has rapidly reduced the time taken to obtain credit. Spending habits have also changed; according to literature in publication Financial Peace, consumers are estimated to spend 12-18 percent more with a credit card than if they were using cash. The ease of purchases that technology has introduced has meant that impulse purchases are also easier.
Accountability Is Effortless
Keeping track of your money has changed. Decades ago, managing finances in households entailed an afternoon of going through receipts in a bid to balance your checkbook. With the innovative progress made, staying abreast with money is instantaneous. With budgeting and personal finance smartphone apps, keeping track of your finances now take less than 5 minutes. It’s not just checking account balances and bills, but also long term investments and retirement plans.
Money Is Defined Differently
We now live in a society that is largely cashless. While it is still acceptable, the use of debit, credit cards, and cryptocurrency has quickly surpassed cash as forms of payment. In the United Kingdom, only 34 percent of payments are now made in cash. In the United States of America, that figure is now 39 percent of all in-person transactions. More recently, fintech companies have introduced mobile and pin payments, further confirming the move into a cashless future, and consumers are embracing it.