With the increasing use of technology in financial services, financial health should be the main focus to benefit both customers and financial service providers.
The increasing use of technology in financial services
The increasing use of technology in various ways is disrupting financial services. Fintechs meet customer needs, innovation and optimization needs, as well as security requirements by implementing technologies such as artificial intelligence, robotics, digital payments, digital identity and blockchain. These technological integrations into financial services and products are used to improve a client’s overall financial health.
For example, Blockchain technology is used as a security measure by financial institutions to action bluff. Integrating customer intelligence with robo-consulting services becomes the next logical step to protect and grow investments and help people achieve their financial goals.
At the same time, with the advent of technology, the nature of financial services and the way recipients perceive them are changing around the world. Investors strive not only to grow their money and achieve excellent returns, but also to achieve financial well-being and good financial health. Thus, technology should focus on ensuring financial health in parallel with financial services for true customer focus and the revolutionary transformation of the financial services industry.
What does financial health mean?
Financial health is an umbrella term for an individual’s overall financial situation. He understands how much the person spends, saves and invests. Although financial health is positively influenced by good financial decisions, careful planning, and the support of financial service providers, their absence leads to extreme financial stress and worry. Thus, financial health is reflected not only in people’s credit scores. It covers various other aspects, including the health of saving and investing, the health of spending, Health Planning, and Health Protection.
Therefore, financial service providers should focus on improving the financial health of individuals rather than the effortless use of technology to provide better services. Reducing financial stress and improving financial health can improve the overall emotional and mental well-being of individuals, and therefore the use of technology to improve financial health should be the top priority of fintechs and other financial service providers.
How can technology be used to improve financial health?
In today’s times and circumstances, technology is the ideal way to think about the next generation of financial services. However, financial health should be central to the provision of financial services. The goal should be to focus on reducing people’s financial stress, providing them with a financially balanced life, and responding to overall financial well-being. The world right now needs the paradigm shift from product-centric financial services to customer-centric services to improve financial health.
A large number of fintechs are concerned about the financial health of the community and are making significant efforts to achieve it. For example, a fintech start-up, Monese, is working to provide direct UK current accounts to the 1.7 billion mature without a bank account in the UK to increase financial inclusion and financial well-being. Other platforms like Moneybox, Moneyfarm, and nutmeg help people move their money forward with their robo-advisory services. The use of the API when accessing banking services is becoming increasingly popular because it helps customers get a holistic view of their financial situation and situation by consolidating their financial information with banking and non-banking financial institutions.
The opening of banking services also makes it possible to identify the best financial products and services adapted to each client. Companies like Finpoint, Bankware, Hope Macy and Moneyinfo are currently using the opening banking innovation to help their financial products and services. Other players in insurance and employee welfare are also using technology to improve financial health relative to financial services.
Especially in times of recent times and post-recent times, when people and communities are struggling with financial health issues and recovering from chaos, the use of technology can greatly contribute to reducing financial stress and promoting financial well-being. Technology can be used to analyze financial transactions and financial data to prevent people from falling into financial pitfalls and avoid financial mistakes related to borrowing, saving, investing and spending, thereby improving financial health.
So if fintechs focus more on financial health, they have a better chance of making a much-needed change in financial services. It will help individuals achieve higher levels of financial well-being and will be profitable for fintechs to generate higher and sustainable incomes.