How the internet has changed your financial world
The internet has transformed so many aspects of our lives that it’s sometimes hard to remember how we got by without it. To a large extent we now take email, online shopping, social media and being able to search for information about nearly any subject for granted.
Similarly, unless we stop to think about it, we may not realise how the worldwide web has changed the way that we manage our finances.
In many ways the internet has given us an unprecedented level of control and flexibility when it comes to our financial arrangements. The most obvious example of this is online banking.
We can now check our balance and move money around from home or when on the move, 24-hours a day, without having to make an appointment at the bank or get anyone’s permission.
Again, this is a facility that it’s easy to take for granted. But being able to pay bills and shift money between accounts, while keeping an eye on what’s going in and out, thereby avoiding overdraft charges or debt interest, is one of the great advantages of internet banking.
There are also many different apps and websites designed to help you manage your personal finances, either at home or on a small business basis. You can download or access tools to track your spending, create budgets and analyse your financial behaviour. You can set goals and work out ways to achieve them.
Of course, all of this was theoretically possible before the internet, but it often required going on a money management course in order to learn the skills required. Now you can learn how to manage your finances officially by reading a blog or watching a video tutorial, or simply let the software do it for you. In most cases these services are available free of charge.
Digital technology has completely restructured the financial sector, automating much of the process of calculation, analysis and investment. Using algorithms and artificial intelligence, the world of investment is now faster, smarter and more far-reaching than ever before.
The internet and digital technology have also made investing across a wide range of markets far more accessible to more people. You don’t have to be a professional investor or finance expert to invest in the stock market online, although it’s certainly advisable to get expert advice before plunging in. But that advice is also available on the web, with a host of sites and services helping you to create a portfolio, buy and sell, and find Australian futures brokers that are right for you. There are also a host of software applications and investing tools that you can download or use online, in many cases free of charge.
The emergence of blockchain technology in recent years is a major milestone in online finance, and many believe its full impact is yet to be felt. What is revolutionary about blockchain is that it allows secure digital transactions to be recorded and dated in a way that’s virtually impossible to alter or fabricate.
This means that some, though not all, of the security issues with online finance are overcome, and it also opens up new possibilities for handling finance in very different ways. We are already seeing this in the rise of cryptocurrencies like Bitcoin, which rely on blockchain.
Examples of new alternative methods of finance facilitated by the internet also include crowdfunding and peer to peer (P2P) lending, which bypasses banks and financial institutions completely.
Both of these innovations put raising capital back in the hands of people rather than banks and big companies. Once again, although borrowing money from a friend and getting people to chip in to support a cause or back a business venture were entirely possible pre-internet, doing it online makes it a lot easier and most importantly gives you a global reach.
Of course, managing our finances online has also led to a host of new security concerns which we all need to be aware of. Hackers and online conmen attempting to get hold of our banking passwords are now routine hazards, and online finance sites are engaged in a technological arms race with fraudsters as they attempt to keep one step ahead of them.
The good news is that in the majority of cases the security measures are successful. Online banking and financial management are mostly safe, secure, easy and convenient. Investing, raising funds and moving money around are now things we’re all able to do. The internet has put you in control of your finances in a way that was never possible before, and that’s definitely something to celebrate.