The short answer is yes.
It’s no secret that technology is advancing at a rapid pace, making its way into multiple industries. From the healthcare system to the finance world, people are beginning to adapt to a new way of life. When it comes to managing money, many people are doing so at the tip of their fingers. Phones and tablets have given people the ability to invest or save at any minute of the day.
Of course, there are still traditional ways of saving, like making a rainy day fund or setting aside time to meet with a financial advisor in person, but that is just not how many people do it these days. Technology is transforming the way people manage their money, and perhaps it’s for the better.
Technology makes finances more accessible
Everything has gone digital these days. A recent survey found that 48% of consumers use their phones and other apps to do their banking. This is especially true among the younger generations including Gen Z, Millennials and even all the way up to Gen X. The same report found that 16% of Baby Boomers still go to their bank in person as a way to manage their money.
Phones and other digital devices give people the ability to do whatever they need to do at home. There is no need to wait for business hours to get a hold of their finances, because an app on their phone can do it for them. This is important because it allows people to get a head start on saving for their future in the finance world. When inspiration and productivity strikes, it’s good to move with it, so having the tools to make financial decisions at any point in time proves how necessary this type of technology is.
Additionally the ability for users to receive real-time updates and notifications through their phones helps to significantly shorten wait times for feedback. Nobody likes to sit around and wait on hold for 30 minutes just to get help with a simple question from their bank. That’s why in the past few years we’ve seen an increase in tech like Hold for Me by Google, that is aimed at allowing people to get things done faster, giving them more time in their day to do other things. Technology has also adapted to be more cost efficient for people, because more things can now be done in not only a shorter amount of time, but also while cutting out unnecessary middlemen. When it comes to the finance industry as a whole, people can invest smarter and faster, and with smaller amounts of risk thanks to AI that is driven by data and patterns, proving its usefulness for everyone.
The virtual reality of using phones for financing is not just beneficial to the everyday person. It also stimulates productivity for financial advisors themselves. The fact that most things are online now, gives finance experts a sense of organization because everything is right there for them. There are no lost papers or misplacing important documents, because it is all stored safely on their device or in their ‘cloud.’
New advances promote trust
The digital landscape also gives people the opportunity to connect. Because people are on their devices each day, they have the ability to create better relationships with their financial partners. In the past, people would maybe talk with their advisors a few times a year or when major changes happen, requiring schedules to align. Those meetings are often focused solely on how to manage finances, but with resources like RetireUS, people can ask their advisors a quick question whenever. This gives people the opportunity to talk and connect, building trust. Tools like this are especially important when it comes to investing, because people can trust their advisors will help them make the best financial decisions in the finance world.
Disadvantages of technology
Technology does have its ups and downs. One of the biggest obstacles right now is the fact that not everyone can afford the latest technology. National Telecommunications and Information Administration data shows that 1 in 5 Americans do not have access to the internet, because it costs too much. There is a clear disparity in people who had access to quality independent financial guidance, many times reserved for the ultra-affluent.
The digital divide refers to the gap between demographics when it comes to the access of technology. It is only accessible to those who have it, making things harder for those who do not have the same resources. Technology is evolving in today’s day and age, but having the traditional ways of financing is important to make sure everyone has the chance to get their finances on track.
The future of finances
Because technology is always changing, that means the way people manage their money could too. The use of AI (artificial intelligence) has already been brought into the finance industry. These days many apps use AI to figure out spending patterns and habits, or even predict the outcomes of market trends. It can also detect fraudulent activity and protect against cybersecurity attacks.
The use of AI in the finance world will only make things safer for individual users. Their personal information will be locked down behind sophisticated programs that recognize when even the slightest user generated pattern is off, making it harder for hackers to take their money. Finally, AI will also help guide people to make better decisions when it comes to investing, because it can now be used as a resource to educate people on all things finance. For example, people who may not be well-versed in financial terminology or how things work in the industry now have access to an easy tool that explains in layman’s terms the difference between a Roth IRA and a brokerage account, or even what the phrase “FIRE Number” means. New technology does this in a way that is easy for people to understand, elevating people to an equal playing field. This means AI can help bridge the financial gap, because more people have access to the same resources. There is no way to fully predict the next level of AI and how it will affect the way people manage their money. It is better for people to start using this type of technology now, so they can be ahead of the curve as it continues to adapt in the months and years to come.
