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.