Is automation changing the role of traditional banks?
The debate on the impact of automation on ‘middle class’ sector work is growing. White collar jobs such as banking are close to adopting new technologies into their business.
Is technology in this sector taking over jobs, or simply improving services alongside human workers?
A report by Citigroup bank – one of the largest banks in the world - predicts that 1.7 million jobs will be cut in the next decade from banks in Europe and America. It also looks at how new Fintech* companies are innovating on normal banking models.
What is Fintech?
Fintech is a short form for financial technology company. They use new technology to provide better services or create new ones.
In this part, we’ll look at how fintech companies are using technology to get in on the action and gain market share (i.e. gain customers), and how traditional banks are using tech to improve services.
A new Bank called is an example of a Fintech company. Monzo recently attracted another £70m investment into their company. Monzo are a new sort of bank. Your account is controlled via an app on your smartphone device, in a quick and easy way.
Lost your card while on your way out? You’re able to freeze the use of your card instantly at any moment on the app. Quick and easy.
Other features include quick payments to friends, as well as the app popping up and showing you how much you spent during a day.
Traditional banks have phone apps, but they are usually slow and sluggish compared to banks such as Monzo. You can see why new banking models such as Monzo’s are attractive, especially to the new generation of young people who are growing up with technology.
Gateway to investing
The investing sector has also been changed. New fintech startups such as MoneyBox allow you to invest in funds in a simple and easy way straight from your phone!
*What does it mean to Invest?
Investing means putting your money into a pot that you hope will grow over time. For example, you pay £100 to invest in a new café in town, and now you own 10% of that café. This now means you have 10% worth of stock (or share) from this café. If in 1 year the café grows 10x in terms of profits, your share will multiply by 10, and so you money will multiply by 10.
An investment fund is a collection of these stocks, so one fund can have stocks from companies like Apple, Microsoft, Amazon, all in one! This is so that you minimise the risk if one of these companies fail.
In addition, it makes it cheaper to invest in these companies whose shares are traditionally quite expensive. Apps like MoneyBox allow you to invest with very little amounts, such as £2.
This makes it easy and quick for more people to get involved in investing.
What does this mean for you?
Accessing your bank account is as easy as checking your messages;
Investing in stocks is cheaper and easier than ever before, again through your smartphone!
You and I are now more capable than ever of controlling our financial lives! Before, you’d had gone into a bank or cash machine to check your balance, for example. In the past, to get into investing, you’d have to be a sophisticated guy in a suit who worked in the City or Canary Wharf. Now, we can do all of this whilst still eating breakfast!
Just to note here, investing is risky, and there is a chance you may lose more than you gain, so even if you are able to invest from your phone, does not mean you should!
Keep informed by listening to experts, such as Nick and Ola here on Economic Street, and you’ll have a much higher chance of success.
Tell us what you think in the comment section below!
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