Technology & Its Impact
FinTech is a dynamic and complex intersection of financial services and technology-based companies. The growth of this market is significant with new companies and merging technologies driving innovation to provide consumers with new choices and tools.
FinTech is even being shared by companies in developing countries to improve industries, such as agribusiness. One example is a new service in Kenya called DigiFarm. DigiFarm is a winner of Fast Company magazine’s 2018 World Changing Ideas award. DigiFarm uses a mobile phone platform to provide farmers with data on livestock and crops. In partnership with Mercy Corps and Mastercard Foundation, among others, the platform gets the farmer timely information on agricultural products, coordinates delivery of goods to local markets, and facilitates receiving payments.
Another term you might have read or heard about is Blockchain. There is a lot of commotion about this term and what it means. Much of the blockchain strategy focused on financial services seeks to make transaction costs less expensive. Other strategies focus on automating contractual agreements. It is a challenge to see what groups are the “winners” in blockchain, so questioning the latest assertions from a tech company on their blockchain initiatives is warranted at this stage. I’d suggest the high degree of questioning go into the proper use of cryptocurrency in a portfolio, as well. These digital assets come with numerous risk factors and may add unexpected volatility to a portfolio.
Through large financial institutions, you are probably seeing increased fintech services offered at your bank and in how you make some (or all) of your payments. This technology may be a time-saver and provide some solutions for the consumer, but it may not be enough for the consumer to achieve their financial success. That’s where an experienced financial advisor helps deliver the valuable services and context to the financial marketplace.
The financial advisor utilizes technology to improve the quality and effectiveness of their practice. That effectiveness also comes in the interaction between the client and advisor during financial market volatility. Within that volatility may be times of opportunity or caution. Putting in place the client-appropriate strategies will help maintain a focus on the long-term goals for the individual. I’d be curious to hear what you think about the changes and financial program enhancements you’re seeing. A few years down the road is Siri going to help us map out our retirement planning destination?