Financial Investments and Borrowing using Mobile Phones
It is evident that mobile banking has caused consumers to ask their banks a series of questions concerning mobile investment and borrowing. As a result, many banks and financial institutions are engaging in vigorous effort to ensure as many as possible customers access banking services. The traditional banking system for investments and borrowing has been cumbersome with a lot of paperwork. Consequently, many have not been able to access such services. However, with the onset of mobile banking that includes borrowing and investment, many are set to grow financially and take control of the global economy (Zweig, 2017).
Furthermore, the financial inclusion of a significant part of the world has occurred due to the readily available smartphones that facilitate mobile banking. Central banks of almost every country are pushing for major reforms in the financial sector to incorporate technology in banking services. The most famous among all measures that the banks and financial institutions are taking is mobile banking. The rush of such buoyancy in the latest financial technology that continues to alleviate poverty through effective investment, saving and borrowing scheme has been fuelled by the exponential increase in the number of mobile users across the world, with countries such as China and India leading the way (Zweig, 2017). While mobile banking will shape the lives of the Fintech clients, it is prudent to also navigate through the possible pros and cons of such investment and borrowing schemes and the available options.
One of the available options for investing is Acorns. The user is required to link a debit or credit card. The option invests funds in a professionally managed ETF portfolios. This app helps in saving because as you drop in your funds, it automatically rounds to the nearest dollars and saves the balance that you would have received had you paid in cash. The disadvantage with this app is that it keeps changing and thus the user may experience technical difficulties. It is also unfortunate because the user cannot borrow funds (Eric & LaToya, 2017).
Another available option for mobile investment is Stash. This app offers similar services as Acorn except that it provides educational content relevant to the users’ investment preferences. It is an excellent option for starters. This app, similar to Acorn, does not offer borrowing options. Besides, MoneyLion is one of the most powerful mobile apps with more than three million subscribers. The app offers investment, borrowing and savings options for its users. Besides, it allows users to access and track their credit score, and a user can start saving as little as 50 dollars. This is one of the most recommended apps for financial services like investment and borrowing (Eric & LaToya, 2017).
Mobile banking apps have various advantages which are common in nature. The obvious is that it does not have physical and tiring queues. Consequently, it saves time for the client and the business too. For instance, the client can easily access Venmo or Robinhood by registering an account. Frequently, the customer will access the account anywhere and track the debt or investment made (Rudegeair, 2018).
Moreover, almost every banking service can be accessed through the phone without much struggle. Such services include ATM locator, remote deposit and withdrawals as well as receiving and payment or transfer of money to similarly mobile users. As earlier mentioned, the major boost for this technology is the readily available smartphones that have made life easier than before (Eric & LaToya, 2017).
Moreover, the financial services that mobile banking offers are often free of charges. There is no cost incurred in operating a transaction in mobile phone banking, and if it exists, the charged fee is minimal compared to the traditional financial banking systems. It is, therefore, clear that the customer can incur fewer costs in handling financial transactions. Besides, accessibility to finances is enhanced since the customer can access using three methods depending on their phone compatibility (Zweig, 2017).
Contrarily, the service comes with certain disadvantages. First, it is somehow insecure. By this, it means that the system is not encrypted. Consequently, an expert hacker can easily access account information and debit and credit card details of users. More still, the messages that the users get from financial institutions is not encrypted. This means the message may have been hacked even before reaching the desired destination. Another critical factor to consider is the lack of antivirus in most smartphones. The phones use internet browsers, yet they do not have antivirus. This still exposes the phone and critical information to risks of hacking. Another obvious defect of using this system is that when the mobile phone is stolen, the whole package of information may be used for illegal purpose. Recently, Venmo experienced a wave of fraud that led to a loss of about forty million (Rudegeair, 2018). Such acts may affect people’s savings and investment in mobile banking.
In conclusion, Fintech clients may use a mobile phone for their financial needs. The options will accrue them various advantages that traditional financial system may not. Some of the advantages include ease of access to services without much queueing and paperwork, low costs of operation, and sometimes zero charges for transactions. However, it is recommended that users analyze each option available critically before making any investment or borrowing decisions. Each option may have hidden “illness” that users and potential users may not easily discover. Besides, Mobile apps have been related to fraudulent activities, and thus users must proceed with caution in using them for banking services. Therefore, great care is needed in using such financial technologies.
References
Eric R. & LaToya I. (2017). The 8 Best Investment Apps of 2019. Retrieved from https://www.thebalance.com/best-investment-apps-4154203
Rudegeair, P. (2018). Venmo Caught Off Guard by Fraudsters. Retrieved from https://www.wsj.com/articles/venmo-caught-off-guard-by-fraudsters-1543068120
Rudegeair, P. (2017). Which Payment App Is Best for You: Venmo, Apple or ‘Zelle?? Retrieved from https://www.wsj.com/articles/how-should-you-play-the-digital-payment-boom-1498469582
Zweig, J. (2017). Inching Your Way toward Wealth with Your Phone. Retrieved from https://www.wsj.com/articles/inching-your-way-toward-wealth-with-your-phone-1486153929
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