Fintech has become one of the most influential forms of technology in everyday life. From accessibility to democratization, the groundbreaking application of computerization and automation empowers individuals not just on a corporate level but a personal one. The simplest and, in many ways, most impactful way fintech is shaking up finance is through accessibility.
Technology makes it easier for consumers to monitor, move, and manage their financial assets, from mobile banking portals to digital wallets. This accessibility doesn’t just empower individuals; it has larger socio-economic effects, too. “Along with helping consumers access and manage money already, financial accessibility has incredible potential to continue helping unbanked or underbanked populations improve their economic status,” said Clay Bethune, founder and CEO.
The ability of previously marginalized demographics to access financial services is an unprecedented hallmark advantage of financial technology. Lending used to be the domain of banks and venture capitalists.
Now, fintech is allowing smaller stakeholders to get in on the action. Peer-to-peer lending enables those seeking funds to access large pools of capital without going through traditional channels. At the same time, it enables those with smaller assets available to lend to combine their value.
This offers more incentivizing sums to those seeking serious cash infusions. An eye-catching statistic is that 84% of businesses in 2020 were run by a solopreneur, up from 76% in 1997.
Bringing financial services to everyone
While many businesses are one-person operations, fintech tools like QuickBooks, Bill.com, and Gusto make it easier for entrepreneurs to manage and sometimes even automate complex microfinance tasks like invoicing, payment processing, and taxes. This financial empowerment is crucial for business-minded individuals with ambition. Financial education isn’t inherent.
It’s a learned behavior—critical for a well-lived life. “This type of education could help students learn core finance elements, such as budgeting, managing debt, and tracking spending,” stated an expert. Without this knowledge, people cannot make solid financial decisions, meaning the difference between financial stability and poverty.
Fintech plays a significant role in this process, with high-quality online resources and individual companies offering educational data. For instance, Coinbase has an entire area of its app dedicated to learning about cryptocurrency and rewards users for correct answers. Fintech is also increasing the quantity of finance-related activities available in the world of investing.
From REITs to cryptocurrency, technology makes these investing vehicles available and easier to use with tools like artificial intelligence and blockchain. Robo-advisors, for example, make managing a portfolio infinitely easier. New fintech inventions, such as breaking down ownership of single assets into multiple pieces, improve liquidity, mobility, and diversification for smaller investors.
Technology is rewriting life as we know it, and personal finance is one area that this revolution has completely transformed. From accessibility and opportunity to democratization, education, and entrepreneurship, there is no area of the financial world that is untouched by the power of technology. This ability to incorporate smaller investors and access underprivileged individuals will only improve over time, creating more ways for everyone to thrive as technology continues to bring the world together.
