FinTech companies are starting up across the globe, but what exactly is FinTech?

What is FinTech?

Financial Technology (or FinTech as it’s starting to become more commonly known as) is a new industry slowly taking over.

FinTech is an industry which offers financial services to people while utilizing the latest software and technology, from computer programs to apps FinTech offers something for everyone.

FinTech covers the more traditional financial service but is also taking advantage of services such as crowdfunding and peer to peer lending.

It’s too early to say whether the FinTech industry is a passing phase or if it’s here to stay, but for the time being new start-ups are launching all the time.

FinTech in the UK

The UK Government have already pledged their commitment to making the UK the FinTech Capital of the World. The UK FinTech industry has already managed to generate £6.6 billion and created 60,000 jobs in 2015.

Recently the UK and Singapore came together to launch the FinTech Bridge. The Monetary Authority of Singapore (MAS) along with the Financial Conduct Authority (FCA) have joined to form a regulatory cooperation agreement.

This new agreement allows UK and Singapore regulators to refer FinTech firms to similar companies based in the other country. There are also guidelines which state how regulators will share and use information.

FinTech vs. the banking industry

The banking industry has recently been featured in the media a lot; with a string of crisis’s affecting consumer confidence banks are finding rebuilding their reputation a tricky task. The FinTech industry, however, is soaring, and this had made the banks stand up and take note.

A recent report has stated that 63% of customers would use and recommend a FinTech company over a traditional financial service.

The banking industry has two options; they can self-design their financial technology platforms, or they can use the existing FinTech company that has pre-designed platforms. Both of these options come with costs and risk.

The benefits of FinTech

The benefits of the FinTech industry are –
• FinTech can offer potential solutions to businesses
• FinTech solutions are effective and efficient
• Financial solutions on offer include improved cash flow generation, capital management, monitoring, online transactions, etc
• Technology exists which can match lenders with borrowers
• The digital aspect of the technology allows for simpler auditing processes

The future of FinTech

It is too early to speculate how the FinTech industry will progress, with new businesses opening every day it would appear that the sector still has a lot of life in it yet.

One thing is sure; FinTech has opened up a whole new side to financial services which forced other industries to change and adapt or else they run the risk of vanishing.

The FinTech industry successfully shook up and brought the Financial Industry back in action.

The long-term impact and the overall success of the FinTech industry will be clearer after a few financial cycles, but one thing is for certain. There will be a lot of people paying close attention to the bigger picture.

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Do you find you are waiting for the payday every month? Are your wages not lasting the whole month?

When pay day feels far away

When your salary just doesn’t quite stretch until the payday, it can feel like a trap with no way out. This situation is affecting more and more families across the country. It may feel like there is nothing that can be done but that’s not so.

Here are some ways to improve your finances.

Don’t live beyond your means

The living beyond your means is a simple but often ignored sentiment. The number one way to give your income a much-needed boost is to make sure you are not spending more money than you have coming in.

Something as simple as completing a budget sheet can help you compare your income against your outgoings. Once you know what you have coming in and out, you can then have a better overall picture of your finances.

The best budget sheets include details of all money going in and out. Once you have completed a budget sheet, you will be able to cut out waste and improve your cash flow.

Stop unnecessary shopping

Although it may seem like you do at the time, do you need the latest game or that dress in the shop window? Stop. Think.

A lot of our income gets wasted buying things that we want rather than need. These expenses are not always such a bad thing; however if you consistently find yourself in a situation where you struggle then, all these unnecessary purchases could be detrimental to your finances.

Once you have your finances under control, then you can allow yourself the occasional treat.

Sync your pay and bill dates

If you find that your bills come out at different times of the month, and so some bills are constantly going unpaid as a result, then it may be the time to coordinate your bills.

However you find it easier, paying everything off at once or spreading the payments over a short period, most companies will be willing to adjust their paydays if you contact them and explain your situation.

Limit the number of credit cards you have

A credit card can be a lifeline for many people; they improve your credit ratings, and they can be a life saver in financial emergencies. However, if you are struggling to repay multiple credit card bills, then it may be time to start limiting yourself to one or two cards.

As brilliant as credit cards are, it is incredibly easy to fall into debt after missing a few payments. Credit cards work best when you pay off as much of your bill as you can afford each month.

Do not let financial stress affect your family

In times of stress, we tend to take out our frustrations on those we love rather than deal directly with the source of our frustrations. This stress can be extremely damaging, not only to ourselves but also to our relationships.

You may feel that by keeping your financial struggles to yourself, you are protecting them. However if the weight of your financial problems is causing you to lash out then, they will still be affected.

Rather than working without your family consent, become a team and work together.

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Searching for a credit card can be an overwhelming and confusing experience.

A quick search on various credit card lenders and a comparison website will bring up an endless selection of credit cards all claiming to offer you the best. It’s important that you understand what you’re applying for before you sign up for a credit card.

Here are some things you should know before applying for a credit card.

What are the benefits of a credit card?

When one uses their credit card responsibly, it can be a valuable and rewarding way to make purchases.

Credit cards offer a quick and handy way to make large, and small, purchases. A lot of credit cards also have additional bonuses for example–
• Consumer protection
• Cashback
• Spread the cost of large purchases
• Loyalty points

What protection do credit cards offer when making purchases?

In the UK under the Consumer Credit Cards Act 1974, consumers have extra protection when they purchase an individual item worth between £100 and £30,000.

However, in the Republic of Ireland, this is not the case. The level of protection for credit cards is the same as debit cards. Purchases made with credit or debit cards are protected by ‘chargeback’.

Through chargeback, you will be able to claim a refund through your card provider for purchases that don’t arrive or are damaged/ not as described. This protection applies regardless of whether the retailer is still trading or not.

Although offering chargeback is not a law, it is still worked into the procedures of most credit and debit cards. Both Visa and MasterCard’s have added chargeback to all of their cards.

Chargeback is also available in the UK.

What exactly is APRC (or APR)?

APRC stands for Annual Percentage Rate of Change (or Annual Percentage Rate as it’s also known as). Mortgages, loans, and credit cards include APRC and APR.

With the help of APRC/ APR, one can understand what percentage of interest you pay throughout the year.

What about interest-free?

The majority of credit cards have an initial interest free period. This term, essentially, means that you can borrow money without incurring any interest charges; this however only applies as long as you pay off your card in full each month.

It is best to check the exact details of your interest-free card, for instance, it’ll be good to know –
• Length of interest-free period
• Charges for cash withdrawals
• Any other additional fees or charges
• The rate which you will begin with post the end of the interest-free period

What are the downsides of a credit card?

As with all things in life, there are downsides to credit cards. The biggest issue people face with credit cards is debt. If you fail to pay your full bill each month, then you will find that interest will quickly build up.

The best course of action is to pay as much of your bill as you can afford each month.

There are also other additional charges for missed payments, late payments, or exceeding your credit limit. There are also substantial charges applied for cash withdrawals; these may still be applicable during interest-free periods.

The post Important Things You Should Know About Credit Cards appeared first on My Money Platform.

Banking scams have hit the UKs financial industry; this has caused fraud rates to rise by 26%. The biggest contributor to this was remote fraud which has cost the UK consumer £168 million in 2015.

Financial fraud is rising

In 2015 £755 million was stolen from financial institutions and British consumers.

The methods adopted by fraudsters are becoming increasingly smart. They are starting to target people directly as a result of financial institutions tightening up their security measures.

Attempts have been made by various organizations and companies to alert the public to new scams adopted by fraudsters. The advice giving out is to remain vigilant and do not give out personal details unless you are 100% certain to whom you are speaking.

Despite these measures, fraud is still continuing to rise.

Remote fraud

Fraudsters will pretend to be bank staff, police officers, or even representatives from various companies. They will contact you directly to either obtain your bank details or encourage you to send money to them.

This type of fraud has become a gray area in the industry, and banks have been known to refuse refunds on the basis that victims handed over their details voluntarily. Victims of this type of fraud have also reported that the police have also shown little interest.

There has been a 64% rise in internet banking fraud and a 92% rise in telephone banking.

Other areas of fraud

In 2015 –
• Card fraud rose by 18% to £567 million
• Cheque fraud fell by 6% with a total of £18.9 million reported lost
• There was also a reported 2.8 million lost toward mobile banking
• Card companies and banks successfully prevented a total of £843.6 million.

What is going to be done to talk financial fraud?

The UK in February announced the creation of a new task force to tackle fraud.

The taskforce will include representatives from the police, the government, and the banking industry.

Despite the announcement of the new task force consumer confidence has been damaged. When you take into considerations that victims get a reply of “we are helpless, or we cannot rectify the problem” by the police or by bank staff then this it’s not surprising.

How to prevent fraud

There are steps which you can take to lessen the risk of being a victim of fraud –
• Remain alert – there is an increase of fraudsters who are imitating Government and company officials
• Do your research – if you are unsure about a phone call, email, or letter you have received then look online, people are sharing their stories and companies also regularly issue warnings
• Be care with payments – be wary of those who demand you pay upfront or want you to use companies such as Money Gram to send them money, legitimate companies and Government organizations will not require you to pay them in this way
• Do not rush yourself – it’s a common tactic among fraudster to rush you or demand you give them an immediate answer, do not allow yourself to feel pressured, take your time and make informed decisions

These are just a few steps you can take to keep yourself safe. New scams are operating all the time, so it is crucial that you safeguard yourself and keep an eye out for fraud alerts.

The post Bank Scams Are Causing Fraud To Increase appeared first on My Money Platform.

In 2012, the RBS Group was hit by a banking disaster due to computer system problems. Could similar complex business codes cause further disruptions?

The 2012 banking IT failure

The RBS Group, which includes the banks NatWest, Ulster Bank, Coutts, and Royal Bank of Scotland, computer systems became severely corrupted after a routine computer update.

The corruptions, which happened in mid-June in 2012, affected the computer systems ability to process payments/ direct debits, withdraw cash, view bank details, and various other banking transactions.

The system failure affected many customers, some of which faced fines for late payments. Some customers had to wait to regain normal access to their accounts until mid-July. In an attempt to assist clients who were affected many branches extended their opening times.

RBS faced a fine of £56 million for the incident in 2014.

Could another event like this happen again?

Banking computer systems are extremely complex and are often ancient.

In the UK the mission critical banking systems have between 800,000 to 900,000 lines of code; this is considerably more than the standard mission critical banking system which only has roughly 6000,000 lines of code.

The bigger and more complex a system is the harder it is to maintain and the likely hood for glitches and corruptions increases. The average UK bank will experience 20 to 30 computer incidents a month.

Keeping in Lieu all that is going on, many foresee another major IT event in progress i.e. near future

Can another incident be prevented?

Avoiding another event like the RBS Group crisis is possible. However, this would not be an easy process, and it would involve banks replacing their core systems with new ones.

It may sound like a straightforward task. However, it is more complicated and time-consuming than it sounds. There is also the risk of issues along the way which could range from slight teething problems to major system breaking problems. Replacing an old system for a new system could potentially cause more disruption than it solves.

The problem with banking computer systems is mainly down to the software. The software most commonly used in banks is ancient, and most of the original designers of the software are no longer available. Due to the old feature of the software, it leads to a knowledge gap as many software engineers do not have in-depth knowledge about the systems they use.

The future…

The banks will be forced to update their systems eventually. Banking systems are under increased strain, and the cracks are already beginning to appear.

It is extremely likely that banks will be forced to update their systems over the course of many years to minimize disruption. In the meantime, consumers should be vigilant when it comes to their accounts.

It is always good practice to regularly check your bank account. Make a note of the amount you have in your account, details of regular payments, keep an eye out for suspicious activity.

The more you know about your account, the more prepared you will be if you are unfortunate to face problems, whether they will be the next banking crisis or theft/ fraud.

The post Could The UK Be Faced With Another Banking Crisis? appeared first on My Money Platform.

Making sure that you know what you’re getting into and stay wise to any hidden potholes makes a big difference to your finances. Not knowing what your options really are can lead to you not getting the maximum possible benefit from any investments. Not knowing the common hidden fees and downsides tucked away in the fine print, as we’ve all probably found at some point, leads to nasty shocks down the line. Wising up to the details of your finances gives you the certainty that you’re making the most informed decision you can.

A problem at all scales

Pretty much everyone knows that, in the end, bankers are out to make money. Ideally, they manage this without you getting burnt by unexpected fees, questionable investments, and the like. But it often feels like the opposite is happening, and the banker is cashing in while your finances seem to be in a tailspin.

Even when things aren’t that bad and it looks like you’re both benefiting, there’s a difference between ‘not going badly’ and ‘best case scenario’. Understanding your finances and how the financial system works can help you to direct your finances to maximise the benefit to you, rather than to a third party.

Sometimes, this is even the case with super simple stuff. When a trust matures – for example, a trust fund set up for a young relative to be accessed once they hit twenty-one – the bank will automatically convert it into a new account unless directed otherwise in time.

In itself this isn’t a bad thing. It’s just that the type of account is going to be the one with the least return for you. And it’s easy to just let it drift into that state of being. Sure, it’s a helpful default that means if you’re not sure where to invest or move the money immediately, it starts racking up interest. Just at a negligible rate.

Knowledge is power

Knowing what the options are, and how the default compares, can make a pretty big difference even at this level to what happens to your finances. Unfortunately, the world of finance is up there with legal jargon for being inscrutable.

It’s also easy to get sucked into decisions thanks to a particularly magnetic promise – particularly good interest rates, say – and not pick up on the conveniently less advertised downsides. So-called ‘hidden’ fees, such as charges to use your card abroad, aren’t exactly something most banks want to splash all over their advertising material! Even just knowing exactly what these fees are can allow you to plan how to minimise how many of them you pay…so long as you can figure out exactly what fees you’ll be charged, when, and why.

Luckily, there are also people who make it their business to breakdown the jargon and go past the flashy advertisements. Not just in the form of advisors for hire, either. The internet is full of people discussing the financial world and how to navigate it, so long as you’re prepared to set aside a little time to browse.

The post How Do You Stop Lining The Bankers Pockets? Knowledge.. appeared first on My Money Platform.

Most people have a bank account but how many of us really understand what the banks do with our money? How many of us feel that we have complete control of our finances?

What exactly do banks do with our money?

Have you ever stopped and wondered what happens to the money you have handed over to be deposited into your account? Or where the money the bank has loaned you comes from?

When you deposit money into your account this is then added to a huge pool of money which contains everything the bank is holding on behalf of all its customers. When you borrow from the bank, this is where the money comes from.

So how do banks make a profit?

The banks make a profit from the interest they charge on overdrafts, loans, and credit cards. They also make a profit from the various fees they charge clients for going overdrawn, late payments, going over your credit limit, accounts with additional bonuses, etc.

Why should I care?

The majority of the countries’ finances are just electronic figures on a computer screen held by the banks. Actual cash (both in circulation and held by the banks) makes up a very small percentage of the countries overall finances. How well a bank does, does not only affect your personal finances because the banking industry essentially keeps the country afloat.

When a bank fails, this has a knock on effect as the bank does not physically have enough money to cover what all of the banks customers has deposited.

Is there anything else I can do to take control of my finances?

Taking control of your finances does not have to be as overwhelming as it may sound.

• Budget – this is probably the most important step, without a budget you will not have a clear picture of your outgoings and income
• Plan – once you have a budget you can start planning, the overall goal will be to improve your income and reduce your outgoings
• Pay off what you owe – using your budget you can prioritise what you owe and work towards becoming debt free
• Start saving – once you start having disposable income you can then begin to start putting money away, you can save up for that dream holiday or for your families future
• Keep going – keeping on top of your finances is a long term commitment

So what can I do about the banks?

You could be forgiven for feeling like you have no control over the money held by the banks. It can appear that ordinary people are powerless against large corporations. However, this is not always the case.

A bank relies on it’s customers to continue to deposits their money. The bank may hold your money, but you have full control of where your money is held. If you are not happy with your bank then you can always switch.

You may not be able to directly control the banking system but you do have control over your money.

The post Banks Know Exactly What To Do With Your Money… Do You? appeared first on My Money Platform.

The financial crash in 2008 caused panic and terror amongst the financial sector. The biggest fear was a complete financial meltdown which would have a knock on effect on other industries.

Why would a financial meltdown cause so much damage?

We live in a world where near enough everyone (including government organisations and businesses) has a bank account. Most people only possess a minimal amount of actual physical cash.

If the financial industry collapses, then this means all account would be frozen. Nobody would be able to withdraw any money; we would be unable to pay for anything. The whole system would be at a standstill.

Why did the crash happen?

The whole financial industry relies on selling various types of debts (or IOUs) in order to make a profit. The debts get passed around until someone cannot pay. If enough people are unable to pay their debts then the whole system collapses.

Since the financial industry is the countries main source of income, a collapse in the industry means that no money is generated.

Will another crash happen?

The government have made changes to how the banks are regulated and who/ how much money they can lend to people. However, if these changes are enough still remains to be seen.

The media cannot seem to make up their minds if we are on the road to recovery or not. Articles published are often vague, confusing, and contradictory. Financial experts however feel that the system is set up so that it will constantly fail and then recover. In order to prevent another crash we would need to dramatically change the system or introduce another source of income.

Could we change the financial system?

In order to change the system we would essentially have to change the way we think about money and power. The system is essentially designed to maximise profit for those at the top. We would need to invent a system with distributes wealth equally.

It may be possible, but it is unlikely to happen.

Could we create another source of income?

We used to generate a lot of income from making goods and then trading them with other countries. However, items can now be produced elsewhere in countries where resources and manpower are considerably cheaper.

We do not make many goods in this country anymore because it is not cost effective. The farming industry is struggling because cooperation want more goods but for a fraction of the price.

In order for us to find another source of income we would, once again, have to change our attitudes towards money.

So, is it possible to prevent another crash?

Quite simply, no it’s not possible. We have created a system in which we are essentially reliant on. In order for things to change we would have to be prepared to spectacularly change the way we think. We would be reliant on others to relinquish their money and power in order to create a fairer system.

As unfair as it may be, no one can realistically expect anyone to just give away their money.

The post Have We Actually Learned From The Crash? appeared first on My Money Platform.

In a world which appears to be run by the banks, it can feel like we are powerless. However, you may have more power than you thought?

Take back control of your money

Money affects all of us, without money we would struggle to survive. This is why it’s so important to look after your money. However, our financial system is designed to make money at our expense.

Since the system is designed to be against us it’s understandable that many people feel unable to fight it. Most people don’t realise that it is possible to be in control of your own money.

Here are some ways in which you can take some power back

Do your research beforehand

The banks are there to make money; they do not always have the publics’ best interest at heart. Bank employees are under immense pressure to make sales and reach targets. This quite often means that customers do not always get the products they want/ need.

If you do your research before speaking to your bank you greatly reduce the risk of being sidelines by hard pressured sales.

Pay cards and loans in full and on time

The banks make their money from debt, the banks rely on people not be able to manage their money. It’s important you ensure you also have sufficient funds in your account and you always pay your credit card and/ or loan payments fully and on time. This minimises the amount of money the banks are making from you.

Switch your bank accounts

Banks rely on customers depositing money into the bank, this money is then used to lend to other customers. The banks then make a profile from the interest and bank charges.

If you feel you are paying too much then shop around and see if you can get a better deal. You also do not need to stick to strictly with banks. Credit unions are a good not for profit alternative to the high street bank.

Look for alternative to loans

A loan is not the only way to obtain money, there are alternatives available –

• Sell goods – you can sell pretty much anything on the internet and there are also shops in the high street which will take various items in exchange for cash
• Online – there are various websites available which will pay you to take surveys, watch videos, etc
  Rent things out – from conventional things like parking spaces and garages from the things you probably never thought us like exercise equipment and electrical goods, you can rent out almost anything
• Odd jobs – from babysitting to mystery shopping there is a whole host of possible ways to make money on the side
• Peer to peer lending – instead of banks lending money to customers you can lend to or borrow from other people

Invest smartly

If you are going to invest, then be smart about it. Firstly, don’t throw all your money at one thing, spread your investments out. Secondly, see investments as a long term commitment, don’t get pulled in by the highs and put off by the lows. Thirdly, make sure you fully understand everything about what you’re investing in, I cannot stress enough about the importance of doing your research.

The post How To Beat The Banks appeared first on My Money Platform.

We are all contributing to the economy one way or another, either through taxes or shopping. We all have our part to play in keeping things going.

The financial industry relies on us

If we stopped banking, spending money, going to work, or any other activity which involves money being circulated then the whole economy as we know it would collapse.

This would cause unknown chaos and it’s something which governments and financial experts have been trying to prevent. This is evident by the countless bailouts, tax increases, benefit reforms, and economic stimulation done by the government

Our contribution starts with the bank

The banks are the financial industries main point of contact with the general public. The bank is where we get paid, where we place or savings, where we get our loans/ credit cards/ mortgage/ insurance. There are very few people who have never had any dealings with a bank.

The banks generate income from charging interest and fees; as long as we keep paying them then the banks continue to turn a profit.

Banks keep money circulating, whether that is through deposits, lending, or allowing people to make purchases. As long as money is exchanging hands then the economy keeps flowing.

We work and pay taxes

If you earn enough of an income then you will be required to pay some level of tax. These taxes are then used to pay for things such as education, emergency services, council services, etc.

As much as we all begrudge paying them, they do play an important role in our society.

The unemployed will still pay some level of tax, even if it’s only VAT on purchases. They may also need to pay other types of tax depending on other sources of income. However, if their only source of income is via welfare benefits then this is unlikely to be the case.

How important is shopping?

It doesn’t matter if we are shopping for leisure or for necessity, shopping is a huge part of our lives. It is also probably the most direct way the general public pumps money into the economy.

The way we shop is changing, we are more likely to shop online and seek out bargains. This has had a major impact on the retail industry and they have had to adapt. Those that didn’t adapt or adapted too late have paid the price.

The economy and me

There are of course other ways you may contribute to the economy, you could be a business owner or a landlord. These are only a few ways in which the majority of the population. Whatever your contribution, it doesn’t change how important a growing economy is.

This is why the economy has been such a hot topic recently. The financial crash has bought the economy into the limelight and people are suddenly taking notice. The media is continuing to report whether we are in recovery or not.

One thing is certain, that money is the foundation as to which our society is built on.

The post It’s Your Money That Makes The World Go Round appeared first on My Money Platform.