Saturday, March 31, 2018

How the Internet Has Shaken Up the Financial World

For years and years before the creation of the internet, banks all over the world
have employed a similar type of business model relatively free from disruption.
However, the internet came along and changed everything. Money can now be
moved around with increasing ease by anyone. Crowdfunding, cryptocurrencies
and robo advisors are just a few of the concepts which didn’t exist only a few
short years ago. So, let’s look in detail at some of the main disruptions which
have been caused.

Highly Focused Products and Services

Rather than just copying the business model of a traditional bank, financial innovators
and entrepreneurs can tackle specific areas which have always caused high levels
of frustration for customers. For example, cross-border money transfers have
always been highly expensive, but now there are companies which are focusing
on making this process cheaper and easier for customers.

Automation of Processes

Many companies in the financial sector are working hard on automating
processes which used to involve a lot of manual work for consumers. For example,
there are plenty of robo-advisers out there which can provide information on
various aspects of wealth management. In days gone by, you would have had
to pay a financial advisor a huge sum of money to get this. You can also read
up on information yourself on topics like the best way to explain forex. There is
such a wealth of material available online that the world of finances has become
more accessible than ever before.

Strategic Data Use

Customer data is easier to collect and use than ever before, and all kinds of
financial service businesses are taking advantage of the ability to directly
target existing and potential clients. For example, there are businesses out there
which can track people’s social media usage in order to lenders to get a fuller
picture of their trustworthiness. Crowdfunding platforms have also helped to
bring investors and entrepreneurs together in a way that was previously
unheard of.

Platform-Based Startups

The sharing economy keeps on growing, and pioneers of the sector such as
Airbnb and Uber have found a way of stimulating user-to-user transactions.
Of course, these platforms have caused a major shakeup of economies all over
the world, and governments are struggling to keep up with the pace of change
with regards to taxation etc.

The internet has made so much possible in the financial world which people
would have only dreamed about in the past. And at the moment, it feels like
we have only scratched the surface of what may be possible in the future.
The rise of cryptocurrencies could start to make us question monetary systems
which have been in place for hundreds of years. Of course, if you want to get
involved in this sector, it is important that you do as much research as possible
so that you are fully aware of what you are doing. Consume as much
information as you can and keep your finger on the pulse.

No comments :

Post a Comment

Note: Only a member of this blog may post a comment.