How Fintech Can Help You Manage Personal Finance

In some countries, most citizens prefer to have savings at home instead of entrusting with their hard-earned money to the banks. For example, in Mexico, many Mexicans choose to continue saving “under the mattress”. According to the Consultative, Scientific and Technological Forum’s study on Mexico’s Financial Education, their finances are not good as the lack of basic financial knowledge inhibits the ability to apply them. As a result, people use informal savings, credit methods, or in some cases, schemes that may represent a risk to their assets.

In Mexico, only 47% of adults have a bank account, and approximately 68% have at least one financial product due to the 2018 Financial Inclusion Survey.

However, Mexico is a country that has very high access to the internet and mobile devices. That’s why fintech companies saw an opportunity to redefine Mexicans’ conception of financial products, attempting to encourage their use through accessible, efficient and user-friendly products.

Which types of fintech are useful for personal finance?

You can choose from several types of fintechs to improve personal finances; Currently, not all of them are available in the Mexican market. However, companies are trying to incorporate elements that improve financial management.

Usually, fintech companies stand out for three elements: lower costs, speed in their operations, and access not limited to a region and schedule. Here are some types of these companies:

Alternative financing – these companies are mostly responsible for granting loans. They usually have lower interest rates than traditional banking and ask for fewer requirements. You can request the credit through its website or application. Additionally, the response time is less than that of banks. Some even have apps that allow you to manage payments, as well as schedule them by date.

Personal finance management and wealth management – these companies focus on advising the consumer to make better use of their money. At first, they diagnose their financial situation. After that, they offer alternatives to improve savings, pay off debts, and hire services such as insurance or loans; They act as a virtual financial advisor. Their services are very useful if you don’t have much experience in managing finances.