New financial technology trends are transforming the field of personal finance

It is not surprising that over the past three years, little has been said about personal finance services in the media. The world has been completely distracted by other matters – particularly those involving big tech companies, big pharmaceutical companies, and big finance.

Digital transformation has witnessed intense discussions in the context of banking and financial services. But the personal finance sector is going through a transformation of its own.

Technology has created a new wave of customers: Millennials and even younger customers are embracing a new era of finance, controlled via mobile technology and offering more products and services than ever before.

Time to change for personal finances

Anthony DiMaresco He is the CEO of the company Banks, a fully digitized Belgian banking financial technology that enables users to monitor the impact of their purchases on the planet. He notes that more young people now have an interest in investing – a space previously reserved for the upper and upper classes of the banking industry. Part of this shift is due to the growing popularity of cryptocurrencies.

“A lot of people, especially young people, are becoming more interested in investing, especially investing in the world of cryptocurrencies,” he says. “Investments – and DIY investments in particular – have become more mainstream since the first lockdown, perhaps because it has given people more time to research and catch up on what was once fleeting interests.

But the current economic climate has also had an impact on customers’ attitudes toward their finances. “Inflation and the cost of living continue to rise, reaching record levels, which once again leads to the search for additional sources of income through digital currencies. In addition, there is a general mistrust towards the traditional banking system, mainly due to the outdated banking environment and inability provide fast and reliable payment options,” says DiMaresco.

New trends in personal finance

green leavesfounder and director of Green Wealth Planning, says that the demand for integrating services that enable consumers to “unleash” their financial potential and use both cash and cryptocurrency has caused significant disruption to the financial services market.

“We are seeing a rise in digital investing, such as cryptocurrencies, with a significant proportion of Gen Z investors, which is at odds with the traditional investment demographic,” she says.

“There has been a significant increase in the number of companies opting for contactless-only payments, which means we are now seeing the largest drop in cash. However, this has also caused the need for more cybersecurity; many companies need to provide end-to-end encryption to maintain on the security of consumer data.”

She also points out that digital transformation has helped the market to develop business models that offer better value to consumers with satisfactory profits. New trends such as virtual meetings via Zoom, Teams, and Google Meets continue to take their toll as many people prefer the flexible working option.

There is a growing confidence in the use of technology as well. “People feel more confident using apps to arrange and manage their finances, and they are less dependent on major banks for their financial needs, which has led to the emergence of many budgeting and money management apps. It is also likely that we will see more new entrants in the future due to consumer demand.” Green says.

DiMarsico agrees with Green, pointing to the 17,000 cryptocurrency ATMs in America today. “It is clear that the desire to use cryptocurrencies in the same way that there is cash, whether it is to pay a bill, buy a meal, or use public transportation. The consolidation of cash and cryptocurrency is a trend that will move to become the future of payments.” “Using a single access platform that bridges the gap between old and new payments brings a variety of possibilities and allows users to learn how to buy and trade cryptocurrencies.”

Political turmoil caused further turmoil

“One of the most significant changes in personal finance since the pandemic has been the accelerated digitization of risk and compliance functions,” says Stuart Esslemont, Global Head of Legal and Compliance at ZEDRA.

Comments on the fact that the industry faces a highly volatile and rapidly evolving environment (regulatory, political, social and criminal). This forces companies to be more flexible and able to handle threats, uncertainties, data requests, and data analysis, often with challenging deadlines.

Esslemont continues to say that the recent sanctions imposed on Russia are changing the landscape. Regulators and other supervisory bodies expected companies to be able to extract data and provide it to them in very challenging time frames. Such situations are time-critical; The potential consequences of inaction can be significant and further highlight the need for investment in appropriate technologies,” he says.

In terms of the solution, Esslemont suggests that companies are striving to be more data-driven and seek to avoid having to string it together from multiple sources. “Deploying the right digital tools, linked to the platforms, will reduce the need for manual interventions and reduce the risk of manual errors.”

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