How FinTech and Social Media Platforms have Partnered Together for Greater Profitability

Have you ever wondered how it is so simple to buy things online? Or been curious to how you are able to purchase goods on social media?

Social media platforms like Facebook are bringing the marketplace directly to their platforms with new financial technology, or FinTech. FinTech refers to applications or processes providing an end-to-end process only using the Internet.

Facebook for example, uses FinTech applications so it’s users can purchase products without ever leaving their Facebook accounts. Not only are people using Facebook and other social media platforms to sell their products, but this also opens up the opportunity for individual users to sell products as well. FinTech applications that utilize money transfer services can have users transfer money from account to account for the product that they are buying.

FinTech is using social media in many other ways as well. In a report done by Accenture and the Partnership Fund, it was found that as of 2013 nearly $3 billion was invested into FinTech ventures, and that number has surely risen since then.

FinTech can use social media profiles for just about everything. Customer service and marketing are some of the strongest ways FinTech companies are improving their businesses. Social media offers customer service capabilities in real time, and being able to market on these platforms has proven to be vital in the newest trends of marketing.

Social media platforms aren’t just getting used in these scenarios though, they are utilizing this technology to enhance their platforms as well. Some of the most notable social media platforms like Facebook and Twitter have been using FinTech for quite some time.

Facebook, for example, offers a peer-to-peer payment feature, where they can exchange money with friends in the Messenger app. Twitter also broke into the space by offering a page where users can discover and purchase items directly within the platform.

Some of the FinTech applications are becoming social media platforms in themselves. The application Venmo is a mobile payment app that lets users communicate with one another within the app itself. Users can add notes for the reason they are sending or requesting money, and the recipient can communicate back. All of this is open for the public or just your friends to see.  

Social media platforms and FinTech companies are both gaining from these partnerships as they are becoming more inclusive for users and easily accessible from one place. Profits for these companies are only going to rise with the partnerships that are in place.

 

The FinTech App Revolution

One extraordinary development in the world of FinTech over the past ten years has been the rise of the smartphone and the rise of finance apps with it. Today, millions of transactions occur via apps: Amazon purchases, bank deposits and withdrawals, Bitcoin transactions, Litecoin transaction, stock purchases and sales, money transfers, and more. For those like myself who were around before the FinTech app revolution, this change in the way that people handle finances is astounding. Yet, at the same time, these changes are becoming more and more ingrained in the way that people conduct business. Below is a brief survey of finance apps out there:

Stocks and Investing

Credited for bringing a large number of young investors into the world of stocks, Robinhood’s low barrier of entry and simple interface makes buying stocks easy. In the realm of social media, StockTwits provides a place for experts and neophytes alike to share their thoughts on stocks, bonds, and other market happenings. Further lowering the barrier of entry are a number of apps that do investing for you. These include Acorns, which uses the spare change from debit card transaction for micro-investments, Loyal3, which makes investing in companies you love easy and accessible, and Wealthfront, which will automatically invest a minimum deposit of $500 for free (as long as the balance is under $10,000). And that’s just barely scratching the surface.

Money Transfer

First and foremost, there’s the app that’s so pervasive that it’s achieved the Google-level status of becoming a verb. Venmo me. With no transaction fee on debit cards and bank account transfers, Venmo has become the go-to app for transferring payments from person to person. Long before Venmo, there was PayPal. While PayPal might not be as popular among peer-to-peer transactions, one place where it has retained it’s glory is in the commercial sphere. Whether shopping online (or even at some restaurants), PayPal is the trusted medium of exchange. Then of course, there’s mobile banking. Nearly every large bank in North America (and some smaller banks), boast mobile banking apps, which make transferring money from person-to-person instantaneous. And that’s only the least of it.

Budgeting

Meanwhile, there are a slew of budgeting apps out there to help people save and spend more wisely. Goodbudget, Wally, and Mint are some of the biggest heavy hitters in the budgeting sphere. All three of the apps boast expense-tracking features which translate into spending and saving tips. Of the three, Mint is often viewed as being the most comprehensive–tackling everyday expenses, but also credit cards, student loans and retirement savings.

So with that quick sound-off, the question is, what are some of your favorite finance apps?

Technology is Changing how we Handle Money

Taking care of one’s finances is usually thought of as something that can only be done by those who have extensive about handling money. Perhaps the idea of finances is more accessible to finance gurus, or people who have taken accounting classes. Younger generations grow up to find the broad idea of ‘personal finance’ looming over their heads, without the slightest idea of how to start handling their money.

Technology is changing this around.

With the advancement of financial technology in general, younger people are being included in the ranks of those who look after their spending and savings. This is a concept that has come to be known as financial inclusion, and it is revolutionizing how money is being tracked. Financial technology in recent years has been striving to make financial security more of a democratic process. It wants to cut down on the number of people who feel helpless in their spending.

The four subsets of this new category of financial inclusion are payment, credit, insurance, and investment, as reports Business Today. Payment is a no-brainer. People need to be able to pay bills, pay for products, and pay each other. This used to be done with physical cash or checks. Financial technology has made it so that money can be transferred from one person to another without them having to physically meet. Mobile wallets exist now, and the question of if physical cash needs to exist at all is becoming increasingly prevalent. If money can be transferred from one account to another instantly, is carrying around cash at all necessary?

Credit is a slightly more difficult concept to grasp, simply because it is not yet available to everyone. Financial institutions need to have a record of transactions to get credit information, but not all financial transactions are connected directly to such institutions. This is why there has been a demand for a universal credit platform, in which all transaction history of an individual is saved and readily available. The credit sector of financial inclusion still needs more work, but it is getting there.

Insurance and investments in a similar fashion have been completely changed by digital smartphone applications. Applications have been, and will be further, making insurance-buying and investing much more convenient for everyone with access to the technology.
Companies leading the financial technology revolution are aware that the digital handling of money has to be easy and reliable. They are still working to make the entire financial industry digital. It will be exciting to see where this technology takes us in years to come.

Chinese Banking Barriers

Cferhan patel yuanhina recently announced some drastic changes being introduced to their private sector. Plans were put into effect earlier this month that resulted in fund transfers being capped, the limiting of daily transactions and more requirements required for users to prove their identities when using their banks. Though implemented to battle the threat of fraud and money-laundering, many feel that the restrictions do not bode well for the Chinese markets.

Limiting online transactions has China’s populace in an uproar. The country’s financial analysts can’t help but scratch their heads at the poorly devised plan to safeguard China’s assets. Especially after China’s premier recently announced a removal of “red tape,” and a call for innovation of the market. The implementation of so many restrictions and rules would seem to be directly opposed to the mission espoused by the premier.

The rise of smartphones brought with it a surge in electronic transactions. Logging more than 400 million annual mobile users in China, the decision to limit this wave of active users seems counterintuitive. Though the limitation on activity would seem like the largest misstep, the real difficulty will come in proving identification when enrolling in online banking. Where you were once able to provide a simple identity-card and prior bank-account information to enroll in online services, China is proposing a multi-tiered identification system that requires tax documentation, educational records, and bank involvement to set up online accounts.

This massive speed-bump in the banking process is sure to result in thousands of irate customers. Beyond limiting the amount of money able to be transferred, these rules would even place restrictions on where citizens are able to make transactions and essentially send money. Currently, no money can be transferred between banks should the owner have accounts in separate branches. It remains unclear how the Chinese government felt these changes would circumvent the currently grim economic state, the changes will not be explicitly formalized until the end of the month. Perhaps the deafening uproar and the nearly unanimous dissent against these drastic changes, will counteract this process, but it remains to be seen how this will be resolved.  

Cryptocurrency Today


Ferhan Patel FintechWith more and more of our lives being handled digitally, it should come as no surprise that our finances be taken care of the same way. Financial technologies (FinTech) has grown into a multi-billion dollar industry, with startups growing at exponential rates each year. Analysts have observed this trend, and many believe that in a brief number of years paper money could be completely phased out. The fluidity of electronic finance reduces costs from customer to vendor, and makes for instantaneous exchange between parties while providing mutual protection.

Born out of the 2008 financial crisis, FinTech startups were an answer to a question that had long been thought insurmountable. How can I best invest my money without relying on the struggling banks? Enterprising entrepreneurs took notice of this, and began developing early FinTech platforms that combined emergent technologies with their financial know-how.

Fast-forward seven years and we’re emerging from the post-financial crisis dust cloud. FinTech has exploded, growing alongside technology at a tremendous rate. In one year, social media’s integration with FinTech grew by four times, and the climb is expected to continue its exponential leaps.

The advent of new financial technologies forced industry dinosaurs to adapt or face extinction. Older firms like Vanguard and Schwab developed what they call robo-advisors to assist customers online and on their mobile devices. Citibank, a giant in the banking world, began rolling out their own cryptocurrency. After the meteoric rise of Bitcoin, Citicoins are Citibank’s attempt at gripping the coattails of the emergent currency.

The elimination of brick-and-mortar banking has forever altered the face of traditional lending. Without the cost of maintaining a physical chain or an employee payroll, the savings are immediately passed on to customers. The reduction in cost allows customers to easily acquire credit lines, and keep the interest rates down by eliminating overhead costs. The strangest phenomenon brought on by the evolution of FinTech is cryptocurrency, and its acceptance in the mainstream economy. From boutiques to restaurants, Bitcoin is accepted alongside any dollar.

There is no telling where the future of FinTech is going. So many of our everyday hurdles have been streamlined by the introduction of modern technology, it’s difficult to imagine what’s next. With many FinTech developments designed for mobile use, the future of finance is literally in our hands.