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November 22, 2018 | 12:04 AM
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Savings Tips

26.06.2018How technology can transform people's finances

online banking with tablet


In an age where the cost of living is high, stockpiling cash is not something that’s easy for people to do – but it’s something that’s essential for those who want to boost their financial position over the long term.

Individual consumers who save find that it pays off in the long run as it allows them to access services and products which require a high level of ready cash, such as deposits for mortgages. But governments and the wider economy also benefit, because high general levels of savings means there’s more cash available for banks to provide useful services like business loans.

But with inflation affecting the real terms cash level of all savers no matter what their overall totals might be, it’s clear that something more needs to be done in order to make it as easy as possible for people to save as much as they can. That’s where technology can help: by providing both basic personal bookkeeping tools as well as more proactive investment-related services for savers, it’s possible to use technology to change a saver’s financial status for the better. 

Savings apps 

With many Australians now carrying out many of their banking tasks on their smartphones or tablets, it makes sense that technology which helps people to save should be rooted in this kind of environment.

One such type of apps focus on simply tracking income and outgoings, and then working out how much the person has to spend and save accordingly. By making the most of modern push notification technology, these apps can remind users to set aside some cash for their savings in a real-time way. 

But apps can do so much more than that when it comes to saving. Some apps, for example, can round up any transaction to the nearest dollar and transfer the difference into a savings account, allowing people to save very small, cent-level amounts which mount up over time. 

There are, of course, some security issues when it comes to this kind of tech: in order to pull the necessary data over or carry out “rounding up” transactions, for example, the app might need to gain access to the saver’s bank account. But by publishing clear and transparent information about how they plan to use the account access they gain, the manufacturers of these apps can ensure that they stay within relevant regulations and also place their users’ minds at rest.

Growing savings 

For the low-risk saver seeking to stockpile cash and increase their savings steadily through low interest rates, savings apps might be enough. But for those who want to grow their savings at a speedier rate by investing funds rather than just saving them, users require a more powerful type of technology is needed in order to achieve their goals – and that’s where so-called “robo-advice” comes in to play. 

By automating large swathes of the process, a piece of software can often determine what investments are right for a particular saver and then carry out the actual investing tasks itself. Usually, these sorts of services are driven by some original input from the user: the platform might, for example, ask savers to describe their attitude to risk. But once the parameters are set, the platform does the investment work – saving the user time. 

No matter what method the consumer chooses, saving is something that can have a real financial impact – and it’s worth it both for the saver and the wider economy. While it’s possible for people to save the old fashioned way by putting a few dollars in a jar every month or setting up a standing order for when their wages arrive, it’s also possible to turbo-charge saving by using either personal finance or investment tools to make it as easy as possible.

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