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Lately, I've been interested in Fintech and I want to share why it's so exciting. I also wanted to share what Fintech is and the pros and cons with it. Fintech is exciting because it can improve the life of someone in many ways. It also changes the way people spend money, bank, and save money. Keep reading and I'll share 12 different ways Fintech can be positive for your life. What is Fintech? Fintech means financial technology. As the name implies it uses technology to help people with their finances. Fintech got started in 1971 and it was referred to as the backend technology of traditional banks and financial businesses. The first successful Fintech company was Paypal that helped launched Elon Musk's many business ideas. What is so darn cool about fintech is it brings changes to banking. So many things are Fintech that you might not have considered. Here are a few things considered fintech and what they do.. Cashless payments - This means paying for things without the need for cash. There is the convenience of not having to carry money, but the transactions can be faster. It also can help with accounting and improve data collecting. Cryptocurrencies - Cryptocurrency is a controversial topic. There are benefits and drawbacks to it. One benefit is that someone can trade these currencies 24 hours a day 7 days a week. There can also be fewer fees. The main benefit I see is that it gives banks competition and forces them to improve. The major drawback with cryptocurrencies is it's “very” volatile, there is less regulation, cybersecurity risks, and some people don't understand it. I've looked at cryptocurrencies a lot and sometimes my head hurts thinking about it. Still, they can be exciting to watch. Crowdfunding – Crowdfunding is the method of raising money from the collection of friends, family, customers, and anyone else. 2 popular platforms would be Kickstarter.com and Gofundme.com. One of the largest benefits is that it can be a fast way to raise cash without needing a bank. You can get instant feedback from your ideas. Plus, it can help gain awareness around your ideas. The main benefit is that it gives banks competition and this is a good thing. Robo-advisors. - Instead of hiring an advisory you can have a computer advisor for investing. The main benefit is it's going to cost you less money. The largest advantage is it's going to give financial planners competition. More competition helps the consumer and this is a positive. When it comes to money I honestly don't trust anyone. I get my own education and make my own decisions. Stock trading platforms – These are apps like Acorns and Robinhood. The main benefit is that it can help people buy stocks. The negative is there are fees and it makes it easier to sell stocks. My favorite investment advice is to “Buy everything and never sell. “ If you buy good companies and don't sell them, you will do well. I'm a fan of just going for an index fund because there are “very” low fees. Applying for a loan digitally – The largest benefit is that it can free up your time. Another benefit is that it can make getting a decision quicker. The drawback is that it makes borrowing money easier and I “truly” believe burrowing money is 99% of the time bad. Still, there are times when it can be beneficial to borrow money. NeoBanks – This is an area of Fintech I'm most excited about. This is a bank that is 100% online. Usually, it's very simple and just offers savings and checkings accounts. The reason I love this is that it can help someone who is doesn't have access to a bank. This can help someone get out of poverty. Online Charity Platforms – The platforms make it easy for someone to donate money to causes they support. A few popular platforms would be Crowdrise and Fundly. The main positive to these platforms allow someone to donate to a cause regardless of geographical limitations. They can be more cost-effective will less overhead. They can help with ease of use and convenience. Another large benefit is that they can empower someone to have more of a voice in an organization. Patreon – This is a platform that helps artists and creators get paid. You might have heard of this when watching a Youtube video. The million-dollar question is why should a creator use Patreon and not just ask someone to directly put money in their bank account? A creator can use Stripe, Paypal, Square, or many others payment platforms to get paid. The benefit is that it's easy to set up and use. Also, other creators use it. Chatbots – Chatbots are artificial intelligence that can chat with someone. The first thing that comes to my mind is those annoying telephone robots when I try to call a company. Still, as machines play a more dominant role in our lives chatbots can bridge the gap between human and machine. Chatbots will also get better with time. The largest benefit is being able to answer questions 24 hours a day 7 days a week. Oh, they can also save money. Another benefit is they can gather data on people who use them. There are drawbacks to using them and one is they lack emotion. They can't handle very complicated questions and require maintenance. Cloud Computing – This is the delivery of computing services over the internet. This service could be storage, hosting, applications, data backup, or anything else. The advantages to using cloud computing are... Reduces costImproves mobilityHelps with securityIncreases speedHelps with software updates. As someone who loves the idea of being a digital nomad and traveler, I love cloud computing. Medicare and Healthcare – Yes fintech is also used for medicare and healthcare costs. One way it can do this is by simplifying payment processes and helping with transparency. Transparency is a good thing, since being overcharged really sucks right? What makes Fintech Exciting? It's estimated that nearly 2 billion people in the world do not have access to a bank account. As you can imagine this makes life difficult. How are you supposed to save money if you can't store your money in a bank? You could hide it under the mattress, but someone can steal it. This fact alone makes Fintech great because it can use technology to help someone with their life. Giving someone access to banking can lift someone out of poverty. The second reason I'm excited for Fintech is opening the doors to funding ideas. This is a broad category but helping money get to where it's needed is a great thing. One example of this is Kickstarter and go fund me. The most successful Kickstarter project of all time is the game “Exploding Kittens.” The most successful “Go Fund Me” project is “The Times Up Legal Defense Fund.” This all has to do with harassment and sexual assault at the workplace. The third reason I'm excited for Fintech has to do with personal finance. The average household debt in the U.S. In Nov. 2020 was $145,000. 47% of people in the U.S. Have credit card debt in 2020. Debt isn't good and Fintech can help someone with this. Of course, I can't forget about Cryptocurrencies and blockchain. Cryptocurrencies are a very controversial topic and the price of Bitcoin has been all over the place. There is a lot of speculation on what blockchain can do in the future. Just like with stocks in the short term it can be a voting machine, long term it's a weighing machine. Everything comes down to how Bitcoin and cryptocurrency can benefit society. The more it benefits society the more valuable it will be. Negatives with Fintech I try not to be the Debbie Downer, but there are pros and cons to “everything.” I want to share some of the cons that I have thought about with Fintech. Fintech can make banking easier and this also has to do with borrowing money. There are “very” rare times when borrowing money can be positive. The ONLY thing that comes to my mind is when you're buying a property that is an insanely great deal and has a tenet that is paying the debt. 99.9% of the time I don't think borrowing money is a good idea. “The debtor is a slave to the lender.” I do think is accurate. https://www.youtube.com/watch?v=3qZ9CMbtDQA Since I love freedom I hate debt. Fintech can help someone burrow money. It makes things easier and faster and this can be a negative. Another negative has to do with security. With “ALL” of the banking going digital there is a risk for hacking, malware, and loss of money. You see it in the news about people not being able to access their cryptocurrencies. Sure, traditional banks still had bank robbers with guns, but there is a security risk with Fintech that I have to mention. The last negative that I want to mention is that Fintech can make spending money easy. You already know many people in the U.S. and around the world have money problems. Usually, debt and money issues have to do with buying dumb shit. When someone spends paper cash they psychologically feel the money leave their hands. This is painful and it's healthy. When someone pays with a credit card or using their phone, they get the card or phone back. They don't feel this painful loss of physical cash. I fear for some people this can increase their financial problems. Conclusion I feel fintech is going to be HUGE in the future. Still, there are going to be many changes, just like when the internet was first created. This is one of those industries I'm planning on watching more quickly. I predict there will be many more booms and busts in this industry and it's going to be exciting to watch. I hope this blog post on why is Fintech exciting was helpful to you. Bye for now.