Fintech solutions to problems of Savings
“The key to success is making a habit of doing things you fear”– Derek Colfer, Visa
What is Fintech?
Fintech stands for the use of technology in providing financial services and products to customers; areas this applies to are finance-related areas such as banking, insurance, and investing. The combination of the words ‘financial’ and ‘technology’= Fintech, a technology-enabled economic invention, which is altering how financial institutions provide services to consumers and businesses and how customers and businesses manage their financial matters.
Fintech is a reasonably new term but not a new concept. In fact, the idea of Fintech has existed for a long time and coming up with new innovative ideas has always been crucial in the financial sector, but the speed and impact of change have changed. Because of this, the Bank of England was inspired to launch the ‘Future of Finance’, which delves into potential changes the financial system may have in the next ten years and how this could affect society’s priorities both in the present and in future. Technology has reshaped the financial sector and with widespread internet access with devices such as smartphones and laptops, this has added to the speed of transformation which has increased rapidly in more recent years.
What is the objective of Fintech?
Fintech firm’s objective is to come up with new innovative ideas, to create a more positive outlook towards saving and to provide consumers with the incentive to attain their personal savings goals, whatever it could be. There has been an encouraging increase in consumers motivation to try new providers for their financial requirements, contributing to expansion in the market. According to CASS statistics, Digital opponents, including Monzo and Starling, have progressively taken current account customers away from traditional banks for a few years.
How is Fintech already shaping the world of Finance?
In the UK, a large part of the population has a weak relationship with their money. According to the Money Charity, 46% (12.6 million) of UK households do not have any savings or have less than £1,500 in savings. People may find it challenging to save because of low-interest rates and the uncertainty on what product to go for which has also affected consumers’ ability to save and set money aside. Another reason why our ability to save may be impacted is because of the offerings that the market has presented for quite a while which often fail to meet the saver’s main saving requirements.
Fintech has reshaped the financial realm in several ways; for instance, customers can now open a bank account online without visiting a branch. And accounts can be linked to smartphones and be used to keep an eye on transactions. In addition, technology has come such a long way that your smartphone can be turned into a “digital wallet” and can be used in place of a bank card to pay for things using the funds in your bank account.
Furthermore, Fintech has also changed the insurance and investment industries at an accelerated rate; for instance, car insurance providers sell “telematics-based” insurance which collects data through your smartphone or a “black box” which is installed in the driver’s car. The data can be used to access factors such as the speed of your driving, your braking habits, and how you deal with corners. The data collected is used to access the amount you must pay for your insurance policy. The advancements in technology have also led to customers being able to make investments on the internet on an “execution-only” basis (central bank of Ireland).
How the Fintech `Intellisaving’ is aiming to solve the problems of Cash Savings?
Intellisaving is a savings platform which that helps savers in managing multiple saving and interest-bearing accounts straightforward. IntelliSaving’s smart money-saving app is jam-packed with saving features advantageous to various savers’ requirements regardless of the saving or ISA account. Features include a personalised portfolio for every user that displays information on types of accounts, balances, and withdrawals. A watchlist that is handy for when you want to add an account that has piqued your interest. Intellisaving also displays the best saving rates and best ISA interest rates for you to compare.
Fintech innovations have also been advantageous to companies such as Intellisaving as through Fintech innovations, it is possible to link mobile phones to financial apps such as Intellisaving. Moreover, the combination of Fintech and open banking is revolutionising the banking industry as well as other sectors by making it possible to access many different accounts from one login. Intellisaving uses open banking to facilitate the integration of multiple accounts.
Banks have been around for a long time but are primarily human-focused, and because of their traditional approach, they have found it difficult to adjust to the changes in the financial industry in an increasingly technology-reliant world. As a result, some banks have closed because of the cost to keep them open. This has presented Fintech with the perfect opportunity to impact consumer choices and financial services significantly. Going digital with many of our banking needs has facilitated things for many consumers as many have busy lifestyles and find it easier to manage their financial needs online.
Furthermore, the Fintech industry has continued to change the way financial services are provided to consumers and they well generally benefit from fintech from both a user experience and convenience viewpoint and access to cost savings (Palgrave, Macmillan). Other benefits of Fintech are that there is more financial inclusion. Globally there are more than 2 billion people without a bank account to their name as some don’t have access to a bank account and cannot borrow money for education, and for others who do save money in poorer countries, saving money constitutes as hiding it under their mattress. This is the unjust cycle of extreme poverty. However, the positive side is that it is now possible to give them access to financial services.
Despite the challenges, individuals face in saving, innovations such as Fintech increase the ability to save through more financial inclusion and more digital alternatives than traditional banking. There is no better time to start saving than now, as saving could make all the difference if one day a financial downpour appears on your doorstep. Fintech will continue to heavily influence both the financial sector and how consumers manage their financial services. But how Fintech will progress in future and what new advancements will arise well we will have to wait and see.
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