2020 was a financially stressful year for many – in fact, at the height of the pandemic, a survey from the National Endowment for Financial Education found that nearly nine in 10 Americans said the COVID-19 crisis was causing stress on their personal finances. As a result of this shift in financial needs and concerns, coupled with quarantine and social distancing requirements, more people are turning to the Internet to find ways to make, save and manage money.
But with most things in life, there are upsides and downsides to having easier access to this information. Fintech (short for “financial technology”) can simplify our lives … or it can complicate them if we’re not careful.
To help you become a more savvy fintech consumer, here are some of the most common benefits and potential pitfalls of our increasingly high-tech financial world.
First, the upsides:
- Financial Literacy. Curious about the difference between a fixed-rate and adjustable-rate mortgage? Need a calculator to help you determine your debt payments? Shopping around for saving accounts with competitive rates? With a quick search online, you can find the answers you’re looking for on reputable, accredited sites.
- Stress-Free Saving. Studies show that most people are less inclined to review their bank accounts if they’re feeling anxious about finances, and more likely to check when they think things are going well. But technology makes it easy and stress-free to automate good habits, like transferring a portion of every paycheck to a savings account. Having reserve funds lessen the impact of any unexpected expense in any given month.
- Financial Flexibility. You don’t always have time to make a trip to the bank or cash a check. Mobile and online banking can help you access your accounts whenever and wherever you need, with secure encryption and easy transfers. Over the last year, at-home banking has helped families and businesses manage their accounts at a distance.
But be aware of the downsides, too:
- “Invisible” Spending. E-commerce transactions soared in 2020, as consumers did more of their everyday shopping online. But digital spending can also rack up higher bills, thanks to website designs and algorithms that make it easy to buy and hard to track your total spending.
- Myths and Misinformation. Anyone with a social media account or website can claim to be a financial guru – whether or not they have the expertise to back it up. That means you can encounter a lot of dangerous advice online, some of it malicious. Remember: If you hear about a money-making tip or loophole that sounds too good to be true, it probably is.
At Axiom, we’re committed to leveraging the right mix of fintech to help customers expertly manage their money. With an array of solutions – including Online and Mobile Banking, remote Bill Pay, photo check deposit and much more – it’s easy to take your accounts wherever life takes you. To learn more, visit www.axiombanking.com.
Axiom Bank, N.A., a nationally chartered community bank headquartered in Central Florida, provides retail banking services, including checking, savings, money market and CD accounts, as well as commercial banking, treasury management services and commercial loans for both real estate and business purposes.