Make no mistake; tech has been disrupting the banking industry for some time now. As a result, recent tech innovations are giving people access to make money through trading, cryptocurrency, and predictive analytics. While those in the know can use such tech to their advantage, seeking financial services has been a difficult arena to penetrate for most people — especially minorities and the financially disadvantaged. One thing tech has also been able to do is make this area much more democratic with fewer barriers to entry.
Here’s how tech makes banking more accessible:
Peer-to-Peer Payments (P2Ps)
With the introduction of mobile wallets, P2Ps have become an accessible and convenient means of carrying around and transferring money. This affords users a more comfortable means of paying off loans or debts. Zelle has become one of the most popular options adopted by major banks and credit unions in the US. This is also a preferred option as they do not add unforeseen fees for transfers and the service is often free when offered by banks. For anyone reluctant, these transfers are safe and operate in the same way as a bank account.
Access to Credit
Poor credit scores may scare off people from applying for credit cards because of fear of rejection. The good news is that modern technology and fintech have paved the way for companies to find new ways of assessing credit card applications, with some not even requiring a credit history. Petal Card notes how access to credit is now much simpler with the help of algorithms that can analyze more than just your credit score. Innovations such as these are helpful for those who may not have the right traditional financial background for a good credit score or those just starting with a credit card. Some apps allow people to see if are pre-approved, which reduces the hassle of going through the process only to find out they don’t apply.
Similar to the previous point, borrowers may be hesitant to inquire about loans because of their backgrounds. Thanks to technology, financial institutions can now see their potential borrowers more holistically. With the help of alternative data generated through tech, big data news provider Datanami says that lenders can make more informed decisions. This alternative data covers mobile records, opening behavior, and other necessary records. Customers can therefore be more confident that they will have access to the right loan or banking services as lenders can match these more accurately and without bias.
Here at TechinPost, we have written at length about how consumers can leverage tech solutions to improve their own financial footing. One thing that should be discussed more often is how tech significantly improves financial inclusion and helps people make better financial choices. The more transparency and control a person has the more likely it is that they can avoid the financial pitfalls many people fall into.
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