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How can you invest using fintech apps?

Fintech has introduced a new way of handling finances.

Do you remember the days of standing in a brick-and-mortar bank queue to get essential banking services like a statement or to make a payment?

Not to mention appointments and meetings with professionals to set up a basic will or open a savings or investment account. Fintech has changed how we handle finances, often cutting out unnecessary red tape and intermediaries.

What is Fintech?

Fintech, or financial technology, is a new technology that improves and automates financial services. It’s designed to be user-friendly, helping companies and consumers better navigate and manage their financial operations.

Initially intended for back-end use by financial institutions to streamline operations, fintech has now made its way to the consumer end, making financial planning and banking convenient with mobile apps that are easy to use and understand, e.g. 24/7 banking and savings apps. Fintech has even provided valuable tools to help manage and plan finances, such as retirement calculators and dashboards.

What are the benefits of Fintech?

The innovations developed by fintech have made life much easier for everyday consumers when managing investments, savings and retirement planning.
Modern apps have several layers of protection to keep transactions and information safe and secure. These could include fingerprint scanning, passwords and facial recognition.
Fintech offers many innovations to the modern consumer, allowing them access to 24/7 services and products.
Better access to products
Modern apps offer various financial and investment products that were never before available without an appointment at a brick-and-mortar bank or institution.
Lower fees
Service charges are generally much lower than traditional financial institutions. Some even have no charges. This could save hundreds every year. There are no brick-and-mortar and paperwork challenges.
Convenience and speed
Apps do not have operating hours, so transactions or functions can be accessed 24/7 whenever it is convenient for the user. Also, apps speed up the application process without consulting or getting approval from a person, which could take days. Algorithms instantaneously calculate and approve.
Modern FinTech apps are easy to navigate and user-friendly. They are designed so that many services and functions that were previously only available in-bank can now be accessed by the customer online. This includes applying for credit, opening investment and savings accounts, starting retirement savings, buying and selling on the stock market, or even creating simple wills online.

Improved customer experience – No more waiting for replies from customer service agents or to get approvals and information. Fintech apps supply all these services immediately at the touch of a finger. Customers have access to 24/7 queries via chatbots or live chat.

Most services are fully automated and do not require an appointment or trip to a financial institution.

Accessibility – Fintech apps offer 24-hour access to transacting, accounts, investments, products, and services, no matter where you are in the world. These apps have also given people in poverty-stricken third-world countries access to financial services they’ve never had before.

Kinds of Fintech apps

Modern innovation has led to a multitude of fintech applications covering all areas of financial services, from savings apps to trading apps and calculators.
Savings apps
These are basic savings apps that allow you to save monthly towards a savings pot or goal or even save a lump sum. These apps generally offer basic returns or low interest on savings and are ideal for short-term goals like buying a car, new furniture, or a dream vacation.
Investment apps
These apps are for more discerning investors and offer investments in diversified funds, structured products or even retirement accounts. These investment vehicles offer higher rates of return to build wealth. They are an excellent supplement to enhance a financial portfolio or pension.
Compound Interest calculators
This calculator allows you to calculate the potential growth of an investment according to compounding interest. Different variables, such as the rate of return or risk tolerance, can be selected to simulate growth and value over a period of time, such as 20 years. It shows how much compounding interest could be accumulated over a 20-year period and is ideal for planning ahead.
Retirement calculators
This calculator could calculate the potential value of a retirement investment or pension over a period of time so one can see how much retirement savings will have been accumulated. It can also calculate how much must be invested in a lump sum or monthly to achieve a specific retirement target. This is of great value when planning for retirement and attempting to maintain a particular lifestyle during retirement.
Banking apps
These apps centralise all your banking needs in one easy-to-use place. It could be an established brick-and-mortar bank like HSBC or Santander or modern digital e-money like Revolut, Monese, or Vault, where you can exchange money in different currencies and store it in currency wallets, make global payments, or use a virtual debit card for online purchases.
Crypto apps
These are for users who want to invest in cryptocurrencies like Bitcoin, Ethereum, or XRP, to name but a few. You can buy and sell crypto at the touch of a screen and keep your crypto safe and secure in a crypto wallet.
Trading apps
This is for you if you enjoy the stock market. You can buy and sell stocks like Microsoft, Apple, or Goldman Sachs, invest in indexes like the FTSE or S&P, or invest in ETFs. All your stock market needs are in one trading app with no mess or fuss.

Fintech vs Traditional Investing

While financial technology apps have simplified our financial lives and made it easy to invest and save, they should be considered a supplement to a financial portfolio, not a replacement. Fintech apps are indeed innovative, but some still tend to offer generic returns, services and products for saving and investing.

A financial advisor has the expertise and knowledge to tailor an investment portfolio according to individual needs and risk tolerances and will actively manage a portfolio and ensure that financial goals are attained. They also have the certification to offer the best financial products on the market that will provide optimum returns to grow wealth, and ensure that your portfolio remains suitably diversified in a mixture of stocks/equities, bonds, cash and alternatives to mitigate the risk of losses.
Please note, the above is for educational purposes only and does not constitute advice. You should always contact your advisor for a personal consultation.
* No liability can be accepted for any actions taken or refrained from being taken, as a result of reading the above.

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