Blog - Jacob Parker-Bowles | Fintech

How to Help Eliminate Financial Stress

On February 9, 2022

There is no doubt that financial stress can have a severe impact on not only our personal mental health but also on our relationships. In fact, according to a study conducted by the financial firm TD Ameritrade, 41% of divorced Gen Xers and 29% of Baby Boomers say that their marriages ended due to disagreements about money. While having your personal finances in order is no guarantee that you won’t still fight about money with a partner or spouse, it can go a long way towards creating your own good mental health and wellbeing. Here are three tips to help eliminate financial stress.

Track your spending

It is a sad, unfortunate fact that in the age of credit and debit cards, many people have no idea how they actually spend their money or where it all goes. Before you can create a realistic budget, you need to understand and identify your personal spending patterns. While that $6 latte each day may seem like a small purchase, over the course of a month they can add up to almost $200 and maybe even more if you are inclined to be a generous tipper.

Create a realistic budget and stick to it

Creating a budget is easy, creating a realistic budget that actually accounts for your legitimate spending habits and patterns is much harder. This is partially due to the fact that some of your bills will vary from month to month. While it is fairly easy to budget for static bills like your rent or mortgage or car and insurance payments, creating a realistic food or entertainment budget may be more challenging. Credit cards make it too easy to spend more than you make and making only minimum monthly payments makes it easy to just keep racking up that credit card debt. A budget can help you begin to spend less than you make, but only if you stick with it.

Create margins

Studies have shown that 40% of Americans would struggle to come up with even $400 to pay an unexpected expense. While spending only what you make is a good first step, your stress isn’t really going to go away until you create some cushion for the unexpected. While not spending more than you make is a good first step, ultimately the goal is to spend less than you make.

Increasing your Understanding of Fintech

By Jacob Parker-Bowles

On January 20, 2022

In FinTech, Jacob Parker-Bowles

Financial technology, also known as fintech, is the implementation of technology in the financial industry. The purpose is to improve the ways that financial services are created and delivered to consumers. Technology has also increased the availability of financial services, such as loans and investments, to every member of the public. There are several methods recommended to become more knowledgeable about the emerging field of fintech.

Improve basic skills in finance

Someone who knows nothing about finance cannot expect to become a fintech expert. The first step is to develop a basic knowledge of finance in a diverse range of topics from stocks to lending.

Learn the different sectors of fintech

Once the basics of the financial industry are learned, the next step is to learn about key fintech sectors. The most well-known areas include online payment systems, blockchain, digital lending and digital wealth management. Since millions of shoppers are buying their products and services online, the use of online payment systems has exploded in the past decade.

Blockchain technology has become more advanced as people exchange vast amounts of private information over the Web. It is commonly used in cryptocurrency to conduct financial transactions without increasing the risks of fraud.

Enroll in short-term courses

A short-term course is designed to advance a learner’s skills in every major fintech topic from blockchain to Python programming. A course also gives a beginner firsthand access to experienced fintech professionals. Students can receive hands-on training in the field and start building their financial portfolios.

Review fintech websites

It’s recommended that starter and experienced fintech professionals begin to track financial trends and statistics carefully. Every day or once a week, they should review websites that contain the latest news about financial technology. There are numerous blogs, sites and newsletters that provide regular updates.

The years 2000 from 2021 saw massive changes in the ways that consumers use financial services. Many individuals and business owners had no choice but to use online banking to transfer funds and perform daily financial tasks. Financial consumers are becoming more interested in using machine learning and artificial intelligence. In addition, fintech sector is constantly expanding to include new technology areas and skills. So, becoming a master in fintech starts with a solid foundation based on basic professional skills and knowledge.

Fintech Trends for 2022

By Jacob Parker-Bowles

On January 20, 2022

In FinTech, Jacob Parker-Bowles

Arguably the hottest sector on the planet, fintech continues to roar while 2022 promises to be a banner year for new business models based on financial technology.

What can we expect in the coming year?

A Year of New-Traditional Collaboration

Ever since fintech application began to impinge on the territory of traditional banking, industry observers have been wondering how old and established banking institutions would react. For example, a young entrepreneur can now skip a bank entirely and raise money via a fintech crowdfunding campaign. That same entrepreneur might also ignore a bank in favor of establishing his or her own fintech merchant account.

But the truth is that big banks have never been worried about fintech eating their lunch – just the opposite. They are embracing it and see it as the future of banking. They’re not going to fight fintech, they are going to collaborate more. Established financial institutions see fintech start-ups as a rich source of new revenue streams and as a way to enhance their own mission.

The major fintech buzzword for 2022 is: “Collaboration.”

Payroll Fintech

To date, fintech has been focused on developing payment infrastructures between consumers and sellers. Now 2022 is expected to be the year when fintech enters the payroll sector in a big way. Employees can now expect to see compensation options like “salary on-demand,” and early direct deposit into their personal fintech set-ups. It’s going to make collecting a wage or salary far more fluid and convenient.

Buy-Now-Pay-Later

It’s not a new concept, but when applied to fintech, buy-now-pay-later is simply huge. New operators like Afterpay and Klarna offer multiple ways for people to buy what they want right now with no money upfront. The system is set up for automated payments to be made at periodic future dates. Consumers love it. Those merchants who are adopting buy-now-pay-later schemes are enjoying explosive growth.

Digital Banking Only

Digital banking has been with us for some time. However, in terms of fintech, we’re talking about virtual banks. These are banking entities that have no brick-n-mortar component. Fintech digital banking is a creature of cloud computing. They are “free-floating” platforms that are likely to make stolid granite bank buildings with marbles floors and gigantic stainless-steel vaults a relic of the past.

The Different Categories of Fintech

By Jacob Parker-Bowles

On December 20, 2021

In FinTech, Jacob Parker-Bowles

Fintech is an umbrella term that means more than one thing. By marrying both finance and technology, fintech has created multiple company categories. International money transfers, personal finance, and insurance are just a few branches.

International Money Transfers
International money transfers are used to move money from one bank account to another. This can be achieved on an international level with certain fees. Fintech makes it possible to wire money in a secure fashion for the privacy and safety of its users.

Traditional money transfers take longer to process without fintech. Not only is the transfer of money delayed, but traditional transfers often have higher costs. In the past, individuals have paid as much as 8% for a single transfer. Financial software improves both time and savings for international payments.

Personal Finance
Budgeting can be a complex process. Because expenses are unique to the individual, many people have used financial advisors in the past. These advisors can help organize spending by creating visible data.

With fintech, certain apps are capable of offering individual advice. By using easily accessible forms of visual representation, graphs and databases help more people save money. This is an ideal way to use software for retirement planning.

Borrowing Money
Companies within the fintech umbrella now offer consumer loans. By applying online, individuals save time between the application process and the loan itself. This can be incredibly valuable for those who need money right away.

Certain companies can assess an individual’s credit online. Through automation, these companies can attend to more borrowers than a traditional bank.

How Has Fintech Entered Into The Insurance Business?
Insurance has been affected by fintech. Although it is not in the same industry like finance or tech, the software can benefit insurance companies.

Fintech apps can help those without insurance coverage by allowing time-specific benefits. If an individual needs to borrow a vehicle for only one day, specific apps make it possible for short-term coverage.

The insurance industry is a complex business with well-known organizations. Fintech companies will usually partner with established insurance businesses for regulation purposes. Fintech in the insurance industry is relatively new but is expanding on a regular basis.

Fintech companies design software to help manage money. This is beneficial for both individuals and large organizations. By using advanced software to manage money, financing can be done in almost any location at any time.

Millennials And Fintech Are Driving A Major Change In Personal Finance

By Jacob Parker-Bowles

On December 16, 2021

In FinTech, Jacob Parker-Bowles

Personal loan balances are growing at a staggering rate. TransUnion reports that the amount of unsecured personal loan balances in the USA topped $156 billion in 2019. Not only is the amount of unsecured personal loan balances topping new heights, but the number of personal loans taken out is also reaching new highs. 22.5 million unsecured personal loans were taken out in 2019, a sharp increase of over 16.2 million unsecured personal loans in 2019.

The increase in loan balances is driven by both the demand and supply side for unsecured personal loans. Financial technology firms are driving the growth in the supply of personal loans available to consumers. TransUnion data estimates that almost 40% of all unsecured personal loans originated from fintech companies in 2019. In 2013, TransUnion reported that a paltry 5% of personal loans came from fintech firms. That is an almost 800% increase in only six years.

Experian puts the number of personal loans originating from fintech companies at an even higher figure than TransUnion. They report that about half of all personal loans come from financial technology companies. Traditional banks and credit unions make up the remaining share of the unsecured personal loans market, with banks having about a 30% share of the total market and credit unions taking the remaining 20% share.

The demand side for unsecured personal loans is being driven by a key demographic that is coming of age now. Millennials are that key demographic, and they seem to be taking out much more debt in the form of unsecured personal loans than previous generations. While millennials are taking out more loans than ever before, consumer research by CB Insights reveals that this demographic is incredibly picky about where they decide to borrow money. The CB Insights study commissioned by Bank of America found that Millennials are less trusting of traditional banks and prefer a faster and more convenient way to be approved for a loan than by going through the traditional banking route.

A close look at why millennials choose fintech companies over traditional banks and credit unions for financial services and loans reveals additional vital insights. They strongly prefer the fast and intuitive online interfaces that fintech companies offer for personal loans. However, Millenials’ love affair with fintech companies extends beyond just loans. This generation is increasingly using fintech companies to save and invest too. The low barriers, ease of use, and low fees to investing offered by fintech companies such as Robinhood and Stash make them a favorite among millennials for saving and investing.

Millennials are driving a shift away from the traditional branch banking and lending experience to one increasingly driven by technology. The shift is only expected to grow. Banks and investment companies would be wise to pay attention to this trend as their new customer base increasingly votes not only with their voice but their dollars as well.

What Should You do if You Have a Cybersecurity Breach?

By Jacob Parker-Bowles

On November 9, 2021

In FinTech, Jacob Parker-Bowles

Cyber-attacks or data breaches keep any business in a very vulnerable situation. Regardless of the nature and size of the business, if the company data, customer information or important documents are exposed, this could complicate the recovery process. Some cyber-attacks attempt to acquire sensitive data and information using email fraudulently. Ransomware attempts to block any access to a computer system until the business raises a ransom. Baiting infects a computer system using malware that tricks one to download free movies or music. If the business falls victim to a data breach, it can consider the following steps to minimize the damage.

Initiating a fraud alert

Setting a fraud alert would be the quickest step to warn employees, customers, and other business partners that the business may have been a victim of fraud. The company can then alert the major credit bureaus to add a fraud alert to the business credit report. The fraud alert also helps alert lenders of the business falling victim to a cyber-attack. The precaution notifies the potential lenders to contact the firm before granting any new line of credit in the business name. The fraud alert stays in the credit report for three months and allows the business to renew it when it expires.

Freezing credit files

The addition of a security freeze is valuable in such a situation. The security freeze, which is freely available, prevents potential lenders from accessing the business credit report. It is only by unfreezing the credit account that the lenders will access the credit report. If the business plans to apply for new credit soon, it can postpone the security freeze.

Instruction and information to clients

The company should disclose all the necessary and relevant information regarding the cyber breach to the clients. The report helps clients be cautious about the risks involved if they do not act to reduce the chances of their data getting compromised. Downplaying the caution could lead to grievous liabilities to the business. The information on the explicit instructions to avoid data being compromised should be sent through email or any other reliable means of contact available to the clients. The medium of communication, however, depends on the seriousness of the breach. The business can also advise the clients to use dedicated cyber security software that helps minimize chances of data loss or damage after a cyber breach.

Cybersecurity Tips to Protect Your Company

By Jacob Parker-Bowles

On November 9, 2021

In FinTech, Jacob Parker-Bowles

Cyber security breaches on businesses are becoming more popular over time. In 2017, a Cyber Security Breaches Survey indicated that only less than fifty percent of all businesses identified at least a single cyber security attack. No company is immune to cyber security breaches regardless of the size and nature of the industry. All companies need to protect their customer information, company data, and reputation by employing several steps. This article outlines various tips important in protecting a company from cyber security breaches and attacks.

Multiple layers of protection

Using strong passwords and frequently changing them minimizes the risk of attacks. The company needs to keep monitoring the employee accounts for the risk of breaches through dark web monitoring. The company can use a multi-factor authentication methodology as an extra security platform for its data. The passwords need to be different for different services and websites through reputable password management tools. The company can deploy virtual private networks, firewalls, and antivirus software to ensure the endpoints and networks are not exposed. Sending unencrypted sensitive data and passwords via email should be highly discouraged.

Data backup

Frequent systems and data backups are necessary to recover from data loss or corruption from cyber security attacks. Data protection tools incrementally and periodically back up data throughout the day to prevent leakage. Customer personal details, account credentials, operational data, financial documentation, manuals, log files, and system configurations can also be stored off-site for extra security.

Frequent software update

Outdated and unpatched software allows threats to attach to the company’s data security. Cybercriminals capitalize on vulnerable software through several tactics to gain access to systems and data. The company can apply updated security patches for the operating system and web browsers to secure its devices. Preferably, it is vital to set the software to automatically download software patches or update itself after a particular period.

Employee training

Staff awareness training is a requirement across the entire workforce. This sensitization educates all employees on the most common and malicious scams and the techniques to avoid them. One strategy is cautioning clicking on any links sent within emails, social media platforms, and unfamiliar websites. Due to the evolving nature of cybersecurity, a regular training curriculum could help the fight against cyber security attacks remain relevant.

Financial Tips to Know in Your 40s

By Jacob Parker-Bowles

On October 21, 2021

In FinTech, Jacob Parker-Bowles

Success can be measured in many ways, including taking an account of one’s life and deciding if you are truly living the life that you want to live. An important corollary to living the lifestyle you want is to have a stable financial life, as this is what allows you to pursue your dreams and goals. By the time most adults reach their 40s, they have many years of experience with financial matters. An audit of your monetary life can lead to making decisions that better support your aspirations. In your 40s, the following financial tips can help you to create your life:

Create a budget and follow it: Knowing where your money is going is critical. A budget can help you to balance needs and wants, and it can help you to remember to put money in your retirement account and emergency savings account. It can also help prevent overspending in certain categories, such as vacations or fancy restaurants.

Increase your income: Increasing your income is a vital component, as more money ultimately gives you more freedom. You might choose to pursue a side gig such as tutoring or dog-walking, or you might rent out your basement apartment. Any extra money that is brought in can then be used to pay off credit card debt or a mortgage, both of which will be beneficial.

Eliminate high-interest consumer debt: Debt happens. It is an unavoidable part of life for many people, especially when they first enter the workforce and have entry-level salaries. However, it is essential to get out of high-interest consumer debt when you are in your 40s. Pay off those credit cards and car loans. Try to pay off your student loans. Consider debt consolidation if it will help you rid yourself of debt faster.

Save, save, save: This is the decade to fully fund your emergency savings account, as well as any retirement accounts that you may have, such as a 401(k) or an IRA. You can automate your savings so that a portion of your paycheck is automatically deposited without any effort on your part, which makes it easier to save. While much of the future is uncertain, enough savings will help you to create the lifestyle you choose in your later years.

How Working as a Small Business Owner Could Impact Retirement

By Jacob Parker-Bowles

On October 21, 2021

In FinTech, Jacob Parker-Bowles

Planning for your retirement is a little different when you own a small business because there are more issues that can affect your ability to build the wealth you’ll need. While it may be a more complex and require strategic planning, you can retire on time with the resources you’ll need to enjoy your senior years. This will involve making sure you have enough wealth, and it will involve planning for the succession of your business.

Determine How Much You’ll Need

The first step in this process is to calculate how much money you’ll need to fully fund your retirement. If you own a home, estimate when you expect to repay your mortgage in full. Calculate your monthly expenses and create a plan for having your credit card debt fully repaid by the time you reach retirement age. Don’t forget to include entertainment and leisure expenses, such as the cost of vacations, dining, and other forms of entertainment you enjoy.

Decide How You’ll Handle Your Business

You should already have an exit plan that will establish what will happen to your business when you retire. If you want to continue earning income from the business, you may want to take on a more active partner. If you plan to fully retire, decide if you’ll pass the business on to an adult child or sell the business. If you create an exit strategy now, you can make the arrangements in advance for initiating your exit strategy.

Choose a Retirement Plan

As a business owner, you have a variety of options for retirement plans. You can start saving immediately with a traditional or Roth IRA plan. An alternative is to start a SEP IRA plan, which acts as a pension plan for freelancers and small business owners. In a SEP IRA, your contributions are tax free until they are withdrawn at retirement age. Another option is to start a solo or individual 401k plan. You can use your 401k contributions to create either a Roth or traditional IRA account.

Above all, you should create a retirement strategy early to ensure you are prepared when the time comes. Even though you may have just started your business, it’s not too early to determine how you’ll retire and what you’ll do with your business. Creating this plan now will give you peace of mind well into the future.

What to Look for in Fintech in 2022

By Jacob Parker-Bowles

On September 21, 2021

In FinTech, Jacob Parker-Bowles

Fintech has developed and expanded increasingly over the last decade, with firms leveraging technology, innovations, big data, and analytics. These developments are far from the last we’ll see in the financial sector; as new developments arise, everything that involves finance will be impacted by fintech. Here are some fintech trends to keep in mind as we draw closer to 2022.

Banking

Society is steadily leaning towards becoming cashless, and digital-only banks lend to this growing trend. Fewer people have physically needed to go to a bank and handle their financial issues, resulting in fewer lines and no physical cash to hold. Current online banks, such as the UK-based Monzo, Revolut, and Starling, have seen rapidly growing customer bases that force existing banks to rethink the focus on mobile apps. Fintech improvements continue to shift the banking industry, which has forced banks to close branches as a result.

As customers continue to say they plan on converting to digital-only banking, it’s no surprise that a quarter of all bank branches are expected to close within the next three years.

On the other hand, open banking pledges to deliver more competitive financial services to both individuals and businesses. This banking method connects banks, third parties, and technology providers, consensually sharing customer data with authorised providers.

Blockchain

As digital ledger technologies continue to advance and interest in cryptocurrency grows, blockchain technology will continue to open opportunities to fintech companies. According to PWC, worldwide economies are expected to adopt blockchain technology at scale by 2025. Blockchain continues to disrupt the payment industry, with many people expecting it to become apparent in both the financial sector and, specifically, fintech. This technology enables secure payments and transactions for all who use it while removing the middleman, therefore reducing costs by a large percentage. Presently, cryptocurrencies have successfully used blockchain technology and are prepared to be incorporated into financial institutions, applying them to traditional banking operations.

Financial Literacy

Fintech also provides a way to improve people’s financial literacy, allowing customers access to easy-to-understand financial information so they can make sensible decisions about their personal finances. Not all people, for example, understand the importance of budgeting; not all people are completely informed of the details when making spending decisions. Fintech uses data accessible through open banking to inform customers about the best available choices for them. The hope is to continue educating people in financial literacy throughout 2022 so that everyone can make smart financial decisions.