woman making digital payment with phone

How Financial Technology Has Changed Personal Finance

Managing your finances can be a daunting task. Around 40% of individuals find it stressful to discuss their finances, and 50% get stressed even thinking about them. With this high level of anxiety attached to personal finances, people are looking for easier ways to manage their money.

That’s why financial technology (FinTech) companies have performed well over the past decade. With more FinTech innovation on the

horizon, let’s review the trends that have revolutionized personal finance in recent years.

Credit Cards & Online Payments

The widespread availability of credit cards and online payments has made financial transactions effortless.

People prefer using credit cards and online payment methods, with almost 28% of all transactions performed on credit cards and around 66% of people using online payment methods such as PayPal or Venmo.

Online payment applications have made spending money online so simple and often only requires one simple step, making it very convenient and accessible for everyone.

However, the downside to such easy access to money is that people are encouraged to spend too easily, increasing personal debt rates and making it harder to pay off cards.

Big Data & Consumerism

Big data has wholly transformed the personal finance industry by collecting data and targeting individuals very specifically. Marking companies can also use their large data sets to analyze the trends and habits of spending and consumers.

The use of big data gives companies an insight into individual needs and preferences, allowing them to develop more personalized products and services for each user. Businesses are using this data to create targeted ads based on your likes and dislikes, increasing the effectiveness of their marketing campaigns.

For example, suppose your consumer data shows that you value sustainability and social responsibility. In that case, finance companies may create targeted ads encouraging you to invest in socially responsible investments or funds that match your interest.

Blockchain and Digital Currencies

Blockchain is expected to continue impacting the digital finance space and consumerism over the next decade.

Blockchain technology has also enabled the rise of cryptocurrency. Cryptocurrencies such as Bitcoin and Ethereum run on blockchain technology, allowing them to be used and traded across that blockchain network while maintaining security and privacy.

Blockchain technology, in its essence, is a decentralized ledger containing secure and encrypted information about all transactions on a network.

Blockchains provide increased transparency, safety, and efficiency while lowering costs for financial transactions. This technology can track orders, payments, accounts, and more, making it ideal for personal finance applications.

Mobile Apps & Predictive Artificial Intelligence

Mobile applications have transformed personal finance. Gone are the days when you needed to write down your budget on paper and track your money physically. Nowadays, you only need to download a personal finance app and let it do all the work for you.

Mobile apps can help you track your expenses, monitor your budgets, and even send reminders for any due bills or payments. Additionally, you can use personal finance applications to set your long-term financial goals, track any investments, and even get financial advice.

Personal finance applications are integrating with predictive Artificial Intelligence (AI). By analyzing your spending habits and overall financial health, predictive AI can make personalized financial recommendations for you, including advice on how to save money, what stocks to invest in, and what potential financial risks you may face.

Increased Choices Through Internet & Competitors

The internet has given customers access to various products, services, and any marketplace. The advent of FinTech companies and the rise in finance and budgeting applications has increased the competition between finance and technology companies. Industries such as credit cards, payments, brokerages, and investment tools are classic finance industries than are now losing market share to technology firms.

Competition between finance and technology companies is expected to stay hot as companies try to develop better, more personalized options for their customers.

Josh Dudick

Josh is a financial expert with over 15 years of experience on Wall Street as a senior market strategist and trader. His career has spanned from working on the New York Stock Exchange floor to investment management and portfolio trading at Citibank, Chicago Trading Company, and Flow Traders.

Josh graduated from Cornell University with a degree from the Dyson School of Applied Economics & Management at the SC Johnson College of Business. He has held multiple professional licenses during his career, including FINRA Series 3, 7, 24, 55, Nasdaq OMX, Xetra & Eurex (German), and SIX (Swiss) trading licenses. Josh served as a senior trader and strategist, business partner, and head of futures in his former roles on Wall Street.

Josh's work and authoritative advice have appeared in major publications like Nasdaq, Forbes, The Sun, Yahoo! Finance, CBS News, Fortune, The Street, MSN Money, and Go Banking Rates. Josh currently holds areas of expertise in investing, wealth management, capital markets, taxes, real estate, cryptocurrencies, and personal finance.

Josh currently runs a wealth management business and investment firm. Additionally, he is the founder and CEO of Top Dollar, where he teaches others how to build 6-figure passive income with smart money strategies that he uses professionally.