Self-Driving Money Is Coming To Consumer Fintech

Self-Driving Money

What does self-driving money mean? As a rule, self-driving money knows its owner and makes use of the greatest possible route to lead where you want to go. If traffic is hectic or road is not opened, it finds the best route by itself. However, if it can not lead you where you want to go, it notifies you about such a situation and offers you choices of the nest places it can lead you if you want. 

Self-driving money openly warns you if there is something bad on the journey you surely need to know about. Moreover, self-driving money always notifies you about what it is doing and reasons for it, however, you do not need to fully understand how this vehicle works. At any point, you can alter your destination, and it will alter things accordingly. Just like Google Maps. 

Besides that, self-driving money brings peace in your life. Self-driving money creates freedom. Self-driving money supports you when you wish to provide for the family, friends, and other close people. 

Current situation

Fintech nowadays is dominated by consumer tech platforms that want to redefine financial services. Regardless of an announced slowdown in the activity of fintech financing, founders still succeeded to gain about $8.3 billion in the second quarter of 2020. A usual criticism of these startups like marketplaces, neobanks, and lenders is that they offer the same unified products that are already can be found offline, however, they possess a more advanced user interface. 

To fully understand the importance of consumer fintech, we still need to see these platforms as the essential building blocks for independent finance, which will change how we deal with money. 

The precondition of independent finance is that your finances should be quite ‘self-driving’. You can choose the destination, and a certain platform finds out how to achieve goals swiftly and safely. Some elements of this exist nowadays: roboadvisors such as Betterment or Wealthfront provide questions about your age, investment goals, and risk tolerance before building and managing certain plans for you. However, the capability of self-driving money is much and much bigger. 

These days we control our finances with the help of specialist services. We might bank with Citi, invest with Vanguard, split bill with Venmo, pay off student loans with SoFi, and trade with Cash App. Such fintech platforms possess two main features: their services are managed and the decisions are fully manual.  To completely change the paradigm, wen needs to implement these services and automize them. 

The first advance to automatized finance is to throw away the barriers between these products. Work with banking solutions like Plaid, that unites banks and fintech together, have made it much easier to wire money and data between different platforms. Nowadays, it all looks like a model of hub-and-spoke. You can transfer your money from Venmo to your checking account to Vanguard. In years to come, it will turn into a point-to-point line. You will be able to take storage $350 in Venmo and invest this sum directly into the Roth IRA, or you can split it half between your credit card bill and payments related to your student loan. Self-driving money revolved into a single app that is like some self-driving car that can ride only on one road. 

The second advance is completely related to the autonomous part. Linked fintech services will utilize a mix of machine learning and regular language rules set by users to control money in the background. This surpasses the implementation of a retirement goal on a roboadvisor. You should be able to add in this situation that if you have the extra money in your pocket, other than your daily expenses, you can reinvest it anything that cat gets you a good return. 

Following that, you should not have to think about what is really happening with your investments, other than when you get an update from the service on how it is usually being put into action. On the back burner, the platform would consume data from various devices, find out where your finances could be leverage, and reallocate it by default.  

Such a change should put aside the presence of specialist apps completely. finances would turn into an automatically integrated part of how people move around the world. 

However, this needs more than developing an online private banker. According to futurist Brett King, such a kind of change of paradigm needs first principles of design-thinking. Thus, when you receive a parking ticket, you will pay for it automatically. If you want to buy something from the convenience store, you pay for it with your fingerprint while the self-driven finance platform decides between paying with checking account or credit card. Moreover, if you decide to save money for your child’s college, the budget will go continuously to the 529 Plan with low fees and high yield. 

Self-driving money is still tricky. However, many expert add that startups like Astra, Atomic, and Canopy are starting to develop autonomous, gateless fintech products. As soon as they arrive on the market, the future of money and whole financial worlds would completely change.