2020 was a tough year financially for many people. At the peak of the pandemic, a survey by the National Endowment for Financial Education revealed that nearly nine out of ten Americans were stressed about their personal finances due to COVID-19. Because of this financial strain and the need for quarantine and social distancing, more people turned to the Internet to look for ways to make, save, and manage money.
However, like most things in life, having easier access to financial information comes with its pros and cons. Financial technology, or “fintech,” can make our lives simpler or more complicated, depending on how we use it.
Here are some common benefits and potential pitfalls of our increasingly tech-driven financial world:
**Upsides:**
**Financial Literacy:** Whether you’re curious about the difference between a fixed-rate and adjustable-rate mortgage, need a debt payment calculator, or are shopping around for savings accounts with competitive rates, a quick online search can provide the answers you need from reputable sources.
**Stress-Free Saving:** Studies indicate that people tend to avoid checking their bank accounts when they’re anxious about money, but they’re more likely to check when things are looking up. Technology can help ease this stress by automating good habits, such as transferring a portion of each paycheck to a savings account. Having some reserve funds can mitigate the impact of unexpected expenses.
**Financial Flexibility:** You might not always have the time to visit a bank or cash a check. Mobile and online banking allow you to access your accounts anytime and anywhere, with secure encryption and easy transfers. Over the past year, home banking has enabled families and businesses to manage their finances remotely.
**Downsides:**
**”Invisible” Spending:** Online shopping surged in 2020, but digital spending can lead to higher bills. Websites and algorithms are designed to make purchasing easy but tracking total spending more challenging.
**Myths and Misinformation:** Anyone with a social media account or website can claim to be a financial expert, whether they have the credentials or not. This means you can easily come across dangerous or misleading advice online. If a money-making tip sounds too good to be true, it probably is.
At Axiom, we are committed to using the right mix of fintech to help customers manage their money expertly. With a variety of solutions like Online and Mobile Banking, remote Bill Pay, and photo check deposit, you can manage your accounts wherever life takes you. To learn more, visit www.axiombanking.com.
Axiom Bank, N.A., a nationally chartered community bank based in Central Florida, offers retail banking services, including checking, savings, money market, and CD accounts. They also provide commercial banking, treasury management services, and commercial loans for both real estate and business purposes.