Technology has shaped our personal finances and could change them even more in the future. It will influence our occupation, how much we earn and how we manage money. The Impact of Technology on Personal Finances
Cash discourages spending, but the ease of buying online with credit cards and buy-now pay-later vendors encourages it. Social media feeds a destructive comparison culture and the desire to keep up with the Joneses.
Access to Financial Information
Technology offers the promise of transforming our lives by allowing us to easily access information and make decisions with it. But that’s not without some risks.
In the financial industry, technological advances in banking services have made it possible to sign up for a bank account, pay bills, take out loans and transfer funds through smartphone applications. However, recent studies indicate that the convenience of these new payment technologies may lead to higher debt levels and a lower level of financial knowledge than traditional methods.
Moreover, some of these new technologies allow retailers to access the data in users’ financial accounts to offer them buy now, pay later options that could result in overdrafts or debts.
Access to Assets to Invest in
Digital technology can help to expand the number of people with access to financial accounts. But it’s also enabling new forms of investment, including the growing popularity of cryptocurrency.
Moreover, investing has never been easier. Companies such as Robinhood have burst onto the fintech scene, offering commission-free trades of stocks and other securities through mobile apps. For example, stock prices can swing broadly over short periods.
Similarly, the increased ease of online shopping can encourage impulse spending. And the more removed people become from their money, the less they may value it — which could negatively impact their ability to save, GoBankingRates notes.
Access to Credit
In many ways, technology has given consumers unparalleled power and convenience with their money. From budgeting and saving apps to online banking, and even buy-now-pay-later vendors, there is no shortage of options for handling one’s finances.
The problem is that these tech tools often lack transparency. This may lead to some consumers being more financially vulnerable, especially if they do not have the financial knowledge to understand the risks involved with using less transparent payment systems.
Additionally, technology has made it extremely easy to make impulse buys. Just think of the number of people that swipe their credit cards on their phone at a store, or use a buy-now-pay-later service without checking whether they can afford it. It’s a trend that is growing rapidly, and could ultimately lead to more Americans being in debt than they can afford. This is a serious concern, and we need to address it sooner rather than later. This is why we need better consumer education on the impact of technology on financial decisions.
Access to Real Estate
The ubiquity of technology has brought efficiency to many aspects of our lives, but there are concerns that it may be outpacing us. Critics lament the power of giant social media platforms to skew public opinion, and warn of a potential loss of privacy in an age where virtually every move leaves a digital footprint. Others worry about the impact of intellectual property theft, which reduces the financial incentive to innovate — from paint formulas to rockets. It may also deprive even countries that benefit from stolen technology of learning how to develop their own.
Len Blavatnik, who founded Access, owns interests in companies such as Warner Media Group and Calpine Corporation, a natural gas and power company, and LyondellBasell Industries, the world’s largest plastics, chemical and refining company. His history is one of jumping into complex situations and adding real value needs read more hear.
