How Modern Digital Payment Models Are Disrupting The Traditional Banking System

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The finance industry has evolved tremendously over the last few decades. Banks are perceived as a source of reliable and stable institutions that safeguard assets and wealth of billions of people across the globe. They are the most secure firms in the world today. Change is the way of life, and the banks across the globe take it seriously. Changes to existing infrastructure and models are implemented over a certain period of time ensuring minimal distress to the customers.

It is well understood that any compromise of the banking system can lead to major negative repercussions to the customers as well as the bank. For decades the banks have been upgrading their system in sync with technological advancements introducing easier and more efficient ways for transactions and wealth storage.

Currently, innovative cashless payment systems are taking over the traditional credit and debit card market which have been in existence for 60 years. Now, one can perform instant transactions on bank accounts using smartphone applications, thus increasing the convenience and safety of the customers. The modern payment systems are encouraging the bank account holders to opt for smartphone applications rather than plastic cards. Another payment method includes QR codes which facilitate lightning fast transactions and transfer of information using mobile devices.

An online installment loan, which includes fixed monthly payment and repayments terms, can be availed using online banking features introduced by companies across the globe. Cashless payment systems are synonymous to speed, volume, interoperability, and high-end security.

We are witnessing a major shift in the banking sector from traditional methods to digital-oriented systems offering better transparency and efficiency. It is projected that in the next 20 years, the banking systems will change completely in first world countries. The banks are struggling and competing to keep up with the technological advancements, and are striving every day to provide better and faster services to its customers.

Let us discuss the recent breakthroughs in the banking sector. Digital wallet, a term not understood a few years back, has now become a global phenomenon. It is an online wallet where one can store money and use it to purchase different products depending on the guidelines and the agreement of the developers.

After the introduction and proper marketing of digital wallets, the feedback was overwhelming. Today, transactions over trillions of dollars take place using digital platforms. The attractive thing about digital payment systems is the unparalleled functionality and user-friendly interface. According to studies, users are demanding faster and cheaper online services from the respective banks which can be accessed anytime and anywhere.

The next payment model is the Micro Credit plan offered by financial institutions which offer loans to entrepreneurs and businessmen in growing their businesses in the market. This idea has allowed major brands to become registered lenders providing microloans at attractive rates and plans surpassing that of traditional banks. Currently, the model is not interfering with the commercial side of banks, but it is projected that they will be affected in the future. Micro Credit system offers an efficient solution for small businesses by providing low limit short-term loans based on rigorous data analytics and sophisticated algorithms implemented on huge sets of data.

There exist four major factors which affect modern digital payment models directly. Let us discuss them in brief.

First comes the online Cloud infrastructure, which is to be perfectly incorporated in existing banking systems to ensure smooth and efficient operation of IT services ensuring security and flexibility. A cloud-based infrastructure gives an edge over competitors in the current era.

Integration is a crucial step for major infrastructure transition from traditional systems to modern systems. Proper integration shuts down and isolates the obsolete system, but keep it perfectly linked with the new system.

A new digital banking system includes solid infrastructure and intricate coding which has to be completely correct. Minor errors, redundant coding, and patchy fixes can bring out vulnerabilities in the system, creating long-term problems and affecting revenues, reputation, and infrastructure.

Lastly, services and products offered by banks should be accessible by customers through different mediums at all times. It is important to understand that customer satisfaction is the key to growth and expansions. To achieve this, banks should bid adieu to their traditional methods and collaborate with major technology platforms.

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Are You Financially Prepared to Own a Home?

So you think you’re ready to purchase your first home? Lots of people reach a point where they want to be homeowners, but many end up failing at it because they simply weren’t prepared. You see, there’s a lot that goes into owning a house that you may not have been aware of. Beyond making payments to the mortgage company, you’ll also be responsible for a lot of other expenses. If you haven’t effectively planned for those expenses, your dream home can quickly become the start of your financial demise.

own a homeImage source: Pixabay

How does one know when they’re financially prepared to purchase a property? Start by learning what it costs to own a home (beyond the basics) and compare it to your budget. If the costs are greater than your income, you’re better off waiting. If, however, your income exceeds your household expenses, then you’re ready to embark on the process of buying your new house.

Below is a look at some of the common expenses you’ll need to determine the true cost of homeownership:

Insurance

When you make a purchase as large as a house you have to protect it at all costs. Part of doing this means securing a property insurance policy. Depending on where you live, the company you choose, and how much insurance you’d like, it could add up to several thousand dollars a year. Fortunately, most homeowners insurance companies offer the option to pay the insurance in monthly installments for easier budgeting.

Taxes

Property taxes are mandated by most states. If you own a real estate property, you’ll be required to pay several thousand dollars per year in taxes. This bill is generally required on a bi-annual or annual basis.

Emergencies

You can talk to any homeowner and they’ll tell you that household emergencies always tend to pop up. If it’s not one thing that needs to be fixed, it’s another. Plumbing leaks, electrical problems, HVAC malfunctions, and more could set you back several hundred dollars if not more. It is best to create emergency savings to cover these costs, but if you’re really in a bind there are also opportunities like Maxlend fast cash personal loans to tide you over. You can apply online and receive as much as $1250 to handle your emergency and then repay the loan within the required time frame.

Maintenance and Repairs

Not every household problem will be an emergency, but if you want your house to remain intact, safe, and comfortable, you’ll need to budget for routine maintenance and periodic repairs. Some service providers you may need to call on include the plumber, electrician, HVAC technician, home appliance repairman, landscaper, pest control, and more. Many contractors offer annual service contracts to help you save a bit of money.

Utilities

You can’t very well live safely in a home without clean water, gas, and electricity so don’t forget to factor these into your household costs.

Solutions to Help Cover the Cost of Homeownership

Quite a bit of things you’ll need to afford huh? Fortunately, there are solutions to make owning a home a lot more affordable:

Buy within your means – You should never spend more on a home than you have. In fact, experts say that housing should only account for approximately 30% of your income. Anything beyond that is beyond your means.

Create a budget – Budgeting can help you get a real understanding as to what’s going on with your finances. It can help you to reduce spending, cut down on debt, increase your savings, and more importantly, stretch your income further so you have the money you need to afford the above-mentioned expenses.

Build emergency savings – Whether you can afford to buy a home right now or not, you need a nest egg to fall back on. A rainy day account or emergency savings provide you with the cushion you need. How much you save is up to you, but having at least 3 to 6 months worth of monthly expenses in an account can really come in handy.

Borrow as needed – Sometimes, there are things going on in your house that you simply can’t afford to deal with on your own. In those instances, borrowing from a trusted lender is your best bet.

A lot of money goes into owning a home. Likely more than you imagined. Before you decide to buy your first home, be sure that you’re financially prepared. If it turns out you have to wait, it’s a lot better than investing in something you can’t afford and ruining your finances in the process. Start working to boost your savings, build your credit, and increasing your income so that in a few years you’ll be ready to buy the home you want.

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Top Tips on Saving to Scale up On Your Next House


The prices of property in the UK have skyrocketed over the years, and this has made it even harder for people to upgrade their houses. Buying a bigger and better house will obviously cost you a lot of money, so you should prepare to save up some money and alter your lifestyle. Here are some tips to help you realize your goal:

1. Use the Help to Buy ISA Offer

Saving up for your deposit can be tough. You can easily get demotivated on the way, and that is why you should take all the help you can get. The government, through the Help to Buy ISA offer, will give you 25p for every £1 you save. You will have to open an ISA account in order to access this offer. There is, however, a monthly limit of £200. This means you can access an extra £50 every month from the government.

2. Consider Cheaper Living Options

Living with people may not be the most comfortable experience, but it can help you lower the cost of living. If you have an extra room in your house, you can find a friend or family member to occupy it. That way, you will be able to split bills in the house, including the cost of food.

3. Carpool to Work

If you live near one of your co-workers, you can save a good amount of money by choosing to carpool. This will help you save some money on gas and parking. You can even go a step further and sell your own vehicle. Insurance costs a lot of money, and selling your car can help get rid of this expense. It would even be better for you to use public transportation and car-sharing services such as Uber.

4. Make a Long-term Investment with a Robo Advisor

Robo advisors can help you passively invest your money while keeping your financial management costs very low. For example, the well-known Moneyfarm charges its clients about £16 per month. These services are affordable because of the low overheads. Robo advisors are particularly important to people who have busy schedules and lack sufficient knowledge in finance and investment. The robots will work with little human intervention to invest your money in a diverse portfolio.

It is important to invest your money for the long-term since it will otherwise lose value. Interest rates offered by banks are barely enough to cover for inflation. A good investment will help grow your money significantly and buy a house even faster.

Conclusion

Most people cannot directly pay the deposit on a new home. In order to upgrade to a better house, you may have to save and invest some money. To increase your savings, you can reduce your luxuries by, for example, selling your car. You can even find a friend to live with you. You should also make a long-term investment with robo-advisors as this will allow you to grow your money passively.

Image courtesy of Nattanan @Pixabay

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A Brighter Future- 5 Smart Tips for Achieving Financial Health

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Feel the gap widening? You’re not alone. The chasm between rich and poor is getting greater. For lower-income families, growing inequality can be crippling to bear. However, there is still plenty of hope. With smart planning, fiscal discipline and a bit of ingenuity, struggling households can fight their way out of trouble and achieve a more stable economic existence. Here are five tips for securing a brighter financial future:

1. No Way to Payday Lenders:

Payday lenders are bad news. They prey upon those who are in difficult economic circumstances and only make things worse. Avoid the promises of a quick fix that may leave you struggling to recover indefinitely. If you do find yourself in desperate need of short-term cash, there is a growing number of not-for-profit lenders actively working to help lower-income families achieve a brighter financial future through small fast loans. Their motives aren’t hazy. These not-for-profit lenders want to help people attain financial security and a less stressful financial future by providing tools and services that will set them up for long-term stability.

2. A Little Can Go a Long Way:

Being on a lower income isn’t easy, and it can often feel like money is continually draining out of your bank account, leaving you with no savings. But, a little can go a long way. At the end of each week, set aside a small sum to transfer to your savings account. $5. $10. It doesn’t matter, as long as it’s something. At the end of each month, you will see the savings starting to build, slowly but surely. Saving is a skill that, once acquired, becomes a habit. Start working on that habit today and you will thank yourself in years to come.

3. Cut Out the Fat:

Much of our spending is based on habit. Make a thorough assessment of all your expenditures, and you will be surprised at how many regular items can be comfortably eliminated, freeing up cash for more pressing concerns or savings. Eliminate unhealthy items like cigarettes and alcohol. Make your own coffee in the morning and pack a lunch to work instead of forking out every day. Small measures such as these can add up to big money over the course of a year.

4. Avoid the Credit Card Trap:

The lure of the credit card can be hard to resist. It tempts you with its convenience and shiny ‘benefits’, such as frequent flyer points or gift vouchers as a ‘reward’ for spending a certain amount in a month. However, these “rewards” can quickly morph into punishment. For less affluent families, saying no to the lure of the credit card is a big step in taking back financial control and avoiding the trap of credit card debt. After all, they’re just pieces of shiny plastic.

5. Catch Sneaky Costs:

Bills can have sneaky costs in them that hope not to be discovered, like an extra charge on a heating bill or internet plan. it’s crucial to be aware of these hidden charges and catch them in the act. If you see an item on a bill that doesn’t look right, speak up. Don’t automatically pay it. Contact your provider and ask what the charge is for. Don’t let sneaky costs build up and impact your financial future.

Times are tough for many families all over the country. By taking control of your finances, you can ensure that you and your family are set up for a better future.

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