Whether it is a business account or your personal investments, financial innovation has changed how you see money. Find out how technology affects finances.
Technology is a constant force of change. Each year, new technology comes out that changes how people do things.
One of the more noticeable areas that technology has had an influence on is finance. Financial innovation and technology have influenced each other for years. The way we handle our personal finances has drastically changed from a few years ago.
Here’s a look at a few of the ways innovation in the financial sector has changed things.
Cash to Cards
Many years ago, cash was king. To buy anything, you’d have to carry around physical paper and coins. Remember movies where someone walked into a room with a suitcase full of cash?
Credit and debit cards came along to offer a new way of paying for things. Credit cards added the benefit of delayed payment. You no longer needed cash on hand or even in your account.
Technology has expanded the use of cards over cash even more. Online transactions have avoided cash altogether. This has allowed people to use their credit cards without having to use the physical plastic.
Digital Currencies
The internet has had a dramatic influence on financial innovation. Since its invention, the online world has led to many new forms of payment that didn’t exist before. Now, people can use currencies that don’t exist in the real world.
Bitcoins are one example of these new digital currencies. They are separate from any country-specific currency which allows anyone to use them.
Online Platforms
At one point, if you wanted to use the money in your bank, you had to physically go and deposit or withdrawal funds. Now you can do all that at the touch a button.
There are a variety of online platforms and apps that allow people to manage their funds. These platforms have made personal finances more convenient to handle. Anyone, anywhere, can monitor and control their finances instantly.
Security
One area that has been heavily influenced by financial innovation is security. The effects of new technology have been good and bad when it comes to securing personal finances.
It is easier to monitor finances instantaneously. Banks and individuals can be on the lookout for security breaches. If an issue comes up, people can take action immediately.
Unfortunately, this has also made it easier for criminals to access funds as well. Banks and online platforms are fighting and losing a constant battle over security. Online platforms develop new security measures. Hackers develop new ways to breach those measures.
Financial Innovation in the Future
Financial innovation has made the world a smaller place. Funds are more accessible, meaning people can manage them anywhere in the world. So what does the future hold?
It’s likely that the trend of new forms of finance will continue. As online financing becomes commonplace, newer forms of payment and control will appear. It’s safe to assume that digital financing won’t be disappearing anytime soon.
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