You Can Bank on Financial Apps – to a Degree
Financial technology, also known as fintech, is a growing business model among companies looking to use software to provide financial services.
The ability to make transactions from any location, and at any hour, makes online banking and bill paying increasingly appealing. For this reason, fintech is being embraced by startups and large banks as an offshoot idea for proprietary technology.1
However, while it’s convenient to withdraw or deposit money on a smartphone or tablet, we believe it’s still best to consult a financial professional when dealing with more complex financial decisions. As a financial professional, we’re a call away when you need a detailed assessment of your retirement assets or personalized advice that an app can’t provide.
In the meantime, banks are making strides in simplifying the basic transactions that you can complete from home. We’ve entered an era in which institutions collect “big data” to serve customers the way they prefer. Beyond “multichannel” (delivery on multiple platforms) or “omnichannel” (delivery through all channels similarly), the new “optichannel” approach will analyze a customer’s bank experiences to tailor and deliver services via his or her preferred channel.2
One of the latest fintech innovations attempts to cross the barrier between banking and investment products. Launched in January of this year, an app named Clink is designed to help investors conduct small, low-risk investments. The app links bank and investment accounts to create an automated investing plan — either on a regular basis or every time you make a credit card purchase.
Similar to how some checking accounts allocate money to a separate savings account, a portion of your charge is routed to your Clink account and then invested in a portfolio of exchange-traded funds.3 Please remember that investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.
We believe there are benefits to the simplicity of this technology, but again, you also don’t want to invest your retirement savings on a whim. Before tinkering too much with apps like Clink, it’s best to talk it over with someone who will help you create a retirement strategy that you can feel confident about.
Content prepared by Kara Stefan Communications
1Paul Schaus. Bank Innovation. Jan. 5, 2016. “4 Fintech Predictions for 2016.” http://bankinnovation.net/2016/01/4-fintech-predictions-for-2016/. Accessed May 31, 2016.
2 Jim Marous. BAI. Jan. 15, 2016. “Top 10 Banking Trends for 2016.” https://www.bai.org/banking-strategies/article-detail/top-10-banking-trends-for-2016. Accessed May 31, 2016.]
3Bill Peters. Investor’s Business Daily. April 29, 2016. “How Your Apple iPhone Could Become Your New Bank.”http://www.investors.com/news/why-your-local-bank-is-moving-into-your-iphone/?_cldee=a2FyYWNvbUBlYXJ0aGxpbmsubmV0&urlid=14. Accessed May 31, 2016.
We are an independent firm helping individuals create retirement strategies using a variety of insurance and investment products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial advice. All investments are subject to risk including the complete loss of principal.
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