With the threat of a looming recession, we are set to face more financial pressure in the coming months. Fuel and food prices have already increased dramatically over the past few months, thanks to inflation. In difficult times, households and small businesses would do well to look for ways that fintech can help offset price increases and brace for a recession.
Fintech and Access to Credit
One of the most significant impacts of a downturn in the economy is the rising interest rates, meaning access to credit and loans is more problematic. In the United States, interest rates have already risen to 2.25% this year and are set to increase further to an estimated 3.50%
Thanks to fintech, however, you can gain access to faster and more flexible credit options. One reason fintech makes credit more accessible is that it allows lenders to automate risk assessments meaning speedier loan approvals. In particular, fintech has revolutionized the mortgage sector, with no need to visit financial institutions in person and providing the ability to give mortgage approvals in minutes.
As interest rates rise, so are mortgage repayments, which are already having a noticeable impact on monthly budgets. With the online mortgage adviser Trussle, for example, you can use the online MIP (mortgage in principle) or remortgage calculator and find the best offer available from upwards of 90 different lenders in just a few minutes. Thanks to automated and advanced technology shopping around for the best mortgage deal that will give you the lowest monthly payments is something attainable. The benefits of fintech in the mortgage industry are clear, offering convenience, more choice, and flexibility.
Access Payments with Fintech
The financial services offered via mobile or smart devices have expanded dramatically over the past few years, including everything from bill payments to access to credit and savings. Fintechs are primarily driven by the rise of mobile phones, and due to incredible advancements in digital technologies, the phone has become an electronic wallet.
Fintech has meant that financial and social inclusion has benefited even the poorest economies. Fintech has rewritten the banking sector and has introduced the concept of neo-banking and open banking. In the past, the financial world was closed, and payment transactions were exclusively reserved for banks, but the last few years have seen an opening up of all aspects of the financial sector, including uncomplicated and fast payment methods. Some fintechs, such as Revolute, offer their customers the possibility to not only bank online but invest and trade cryptocurrencies, often at a much lower price than traditional banks.
Many fintech companies have already brought considerable advantages to the financial sector, encouraging greater innovation and offering more and more online banking solutions via smartphone applications. There are now many apps that can even help you start protecting your money, like Digit, which is an automated savings app.
These are just some ways that tapping into fintech can help offset increased prices and tighter budgets in the coming months. Fintech has already proven invaluable, offering lower fees and greater opportunities accessible to everyone.