Having a handle on one’s money is something of a skill, and not a skill that everyone possesses equally. Indeed, a great many UK adults are troubled by debt – 12.8 million, as reported by UK debt charity Debt Justice.
This inequality of both finances and financial literacy has a number of causes, societal and governmental, but is also impacted (both positively and negatively) by the ever-evolving technological environment around the financial sector.
Suffice to say, technology has changed our lives irrevocably in a great many different ways.
Financial management is not the first consideration we would turn to if asked to qualify the ways in which tech has transformed our lives, but it is easily one of the most impactful changes for individuals. How is this so?
1.The Rise of Digital Financial Management Tools
Firstly, most evidently and perhaps most importantly, technological advancement has enabled the rise of digital platforms and banking applications, which themselves have in turn revolutionised budgeting, saving, and investing.
Digital banking apps have given personal banking customers hitherto unprecedented access not only to their bank accounts, but also to a wide variety of financial products – from overdrafts to new exclusive tax-efficient bank accounts.
App-based banking has also enabled us access to automated savings and personalised financial insights – which add up to UK consumers being, on average, £445 better off per year compared to before adoption.
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2.The Emergence of Fintech Solutions in Lending
It isn’t just personal banking that has revolutionised personal financial management; there are other fintech platforms benefitting from digital tech advancement, and which enable advanced access to financial products.
There’s no better example of this than the lending space, which offers alternatives to traditional banking loans. With the advent of such fintech solutions, obtaining secured loans has become more streamlined, offering borrowers quicker approvals and more personalised terms.
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3. The Role of Artificial Intelligence in Personalised Financial Advice
Finally, it is impossible not to examine the ongoing and potential impacts of artificial intelligence (AI) on personal finances and financial management.
AI is a useful add-on for businesses hoping to more equitably engage with individuals on a customer-service level, and a powerful tool to be utilised for providing personalised financial advice and insights within such engagements.
The involvement of AI in banking and financial management apps will also enable the individualised and automated analysis of spending patterns – leading to powerful predictions of future expenses, and the potential for tailored recommendations to improve financial health.
AI hasn’t reached its full potential yet, nor have customer-facing fintech companies properly weaponised AI in their offerings – but the future is assured, and financial management on the individual level is guaranteed to change yet further in the coming months.
