Are you stressed about managing your money? Most of us are at one time or another. Whether you're trying to track your spending or invest spare change, fintech (financial technology) is here to ease your money worries. That's the promise of the entrepreneurs and engineers working in one of Silicon Valley's fastest growing industries.
Five Ways Fintech Can Help
Here are just a few examples of how fintech services could help you with your personal finances.
- Budgeting easily and efficiently. There are budgeting apps that sync with your financial accounts to let you track your spending and savings in real time. You can even track spending in different categories, receive notifications when you exceed your budget and analyze the data to see where you spend most of your paycheck.
- Saving money automatically. Apps can make it easy to grow your savings. Some services use algorithms to calculate how much you can afford to save, and then automatically transfer the money to your savings account.
- Investing with minimal effort. Technology has made investing straightforward and inexpensive. Robo advisors are computerized investment management services that offer low fees, a simple setup and customized investment strategies. Using a robo advisor, you can let a computer create and manage your investment portfolio with just a few clicks.
- Getting paid back quickly. Say goodbye to post-meal negotiation as you and your friends try to split the check. Mobile apps linked to checking accounts let you send and receive money instantaneously.
- Comparing loan offers. There are online services that allow you to enter your information once and receive loan offers from competing lenders. The shopping tools let you compare interest rates and terms, which could save you money over the lifetime of the loan.
You might also be benefiting from fintech developments without realizing it. For example, new technology could be powering your bank's online chat service or suspicious activity alerts.
Keeping Your Finances and Information Secure
Even if a new app or service seems reputable, it's important to take steps to safeguard your finances and personal information.
- Always research an app or service. Search the name of the app or company and look for reviews. Positive reviews by major media outlets are usually a good sign that the service is considered reliable.
- Improve your password security. Password protection is an important aspect of online security. Don't use the same password for two accounts, financial or other, and try to use two-factor authentication, meaning someone can't log in with your password alone.
- Use biometric authentication. Some banks offer biometric authentication that you can use to access your account from your phone. Rather than type in a password, the phone's camera or microphone can verify your identity with your fingerprint, eye, face or voice.
- Enable location-based alerts. Geolocation tracking can add an extra layer of security to your account. With your permission, banks can use GPS data from your smartphone to help verify that you're with your card when it's used for a purchase.
- Use several accounts. Keeping your assets in several accounts can help limit your risk. Even if one account is attacked, you'll have access to your other money while the financial institution looks into the matter and makes you whole.
Bottom Line: Fintech is changing the way people save, spend, borrow and manage their money. Though there are important security risks to consider, these new innovative and intuitive services offer something for everyone.