Will fintech bring financial engineering to as many people as possible?

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For years, the wealthy have had access to a range of tools to maximize their financial situation, including a team of experts who help them avoid paying higher taxes than necessary. Today, a new wave of financial technology, or fintech, has emerged that is democratizing these financial engineering techniques and benefiting the masses.

Fintech helps the everyday consumer in several key areas.

Buying a house

Historically low interest rates have accelerated the movement towards home buying. But, it’s still hard for potential buyers to cough up a down payment. Consider the fact that even before the pandemic, would have struggled to pay an unexpected expense of $400.

This is where fintech comes in. Organizations like Unison will contribute up to 50% of a down payment, or 10% of the total cost of a home, and then take a share of the profits once the home sells. HomeFundIt offers a crowdsourcing platform that allows a user’s network to make purchases at select retail stores and contribute a portion of that sale to the user’s deposit.

Invest

Stock prices leave many investors out of the market. Investing in Tesla isn’t so easy when the company’s stock price is trading above $400 per share. Where is it?

FinTech advancements have led companies like SoFI to offer fractional share investing. For just $1, consumers can now own part of a company like Tesla or Amazon, diversify their portfolio, and avoid fees. It is this type of innovation that will allow easier access to the stock market and the opportunity for the average investor to increase their wealth.

To travel

The coronavirus continues to shift businesses to a digital world, leaving less need for employees to travel. Additionally, organizations understandably want to preserve their funds in times of economic uncertainty. Could fintech help companies make travel easier while preserving a company’s bottom line?

The answer is yes. Take TravelBank, which helps companies manage travel expenses by allowing companies to get an estimate of their employees’ trips, and incentivizes employees to stick to budget. If an employee does, they can share their total savings with their company and apply those funds to purchase credits from partner organizations like Lyft.

Fintech will continue to bring value to the average consumer in these areas and beyond. In particular, technology will facilitate a change in financial services that prioritizes the benefit of the many rather than the few.

This article was written by Daniel P. Simon, CEO, Acquired

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