How To Use Financial Technology To Improve Your Finances
How to use financial technology to improve your finances will become increasingly more important, in the way you shop and do banking, over the next decade and beyond.
I rarely carry cash. I can go weeks without a single dollar in my pocket. The main reason I’m able to live without the need to carry cash is that of the use of online banking and mobile apps.
Let’s start with online banking. In 2016, digital banking became the primary method of banking for 62% of Americans, according to creditcard.com. That’s a 52% increase from 2015.
So what’s accounting for the surge in popularity of online banking? Convenience and improved security. For today’s modern family, traditional banking doesn’t work anymore. Time is an evermore valuable resource not to be squandered by having to go to a bank and wait in line.
For Baby Boomers like my Mom, traditional banking is the safest way to bank. She stills goes to the bank for deposits and withdrawals. She still pays by check. And prefers cash over debit cards. But she’s also 80 years old.
She grew up in an era when deposits were recorded in ledger books. So when she sees in the news about big retailers getting hacked, she’s obviously skeptical of the direction where financial technology is going. I can’t blame her for being old school.
But to truly embrace the financial technology of today, understand that online banking is the future.
We’ve established that more Americans are banking online. As adoption of using mobile apps for banking grows, financial institutions are creating better features and benefits to make mobile banking more convenient for the consumer.
As phone app technology improves, I find myself slowly moving away from my laptop to my mobile phone. I actually prefer to do my banking transactions on my mobile phone. Most apps are well designed, intuitive and responsive.
It used to be that making deposits, transfers, and payments, you had to go to the bank on your lunch break or after work. Now, it can be done after dinner, at a restaurant or while you’re on vacation in the Philippines.
Mobile apps have open the door as far as financial technology is concerned. I can link all my accounts so making deposits, payments and transfers are a breeze. I can send money to an from different checking accounts.
I can pay for my auto insurance, wireless phone bill, and cable all through my iPhone. I’ve even traded stocks and options during my lunch breaks.
Auto Bill Pay
This isn’t new technology, but depending on our circumstances, it can be a useful tool to help you save money.
Nearly all of my bills are set on automatic payment. I do this for several reasons. First, it’s super convenient. I mark all the due dates on my Google calendar so I know exactly when a payment is due.
Second, it saved me the time and effort of going online and manually paying. This may make me sound lazy, but I assure you I am not. The automation process of most of my bills frees my time and mind to do other things that can help me make and save more money.
NFC or Near Field Communication
NFC or Near Field Communication is slowly becoming more popular. Statista reports in a three-month survey, 56% of people have used their mobile phone to tap or wave for paying for goods or services.
With major companies like Apple, Google and Samsung offering their own version of digital wallets, the ability to pay for products and services with a swipe of your phone will change the way we conduct business in the next 10 to 20 years.
Leny and I both have iPhones. I prefer using Apple products because of their seamless integration with their Macs and iPads. Using their Apple Pay feature was super easy to set up with no glitches at the point of sale.
If NFC is the future of point of sale payments, then digital wallets between two parties are the future of peer to peer payments.
With the popularity of debit cards and even credit cards, the use of checks has seen a dramatic decline over the last 20 years. Financial technology is now evolving to a point where even debit cards will start to see a decline in the rising popularity of digital wallets such as Venmo, Square Cash, and now, Apple Cash.
Why are these forms of payment gaining popularity? You can either blame or give credit to the Millenials. Finder.com reports that 64% of Millenials are more likely to use digital wallets over conventional forms of payment.
40% of Generation Xer’s are also embracing the new financial technology. Venmo, Square Cash and Apple Pay are leading the way for consumers to use digital cash as their primary source of payment.
Let me ask you this? Are YOU embracing the financial technology currently available today? If so, comment below on how you’re using technology in your financial life.