We are living in a cost of living crisis. Boil this down to the essentials: can you afford to live? Many of us cannot. Energy bills have gone through the roof; basic essentials from food to shampoo are twice the cost they were; and the idea of a holiday for many has become a dream, rather than an essential.
Why? What’s happened?
Well, it is all to do with the world economy which, for the past decade, has been pretty stable. Then Russia started a special operation in the Ukraine, China started talking about taking over Taiwan, and Hamas attacked Israel, and the world is far more uncertain and unstable. What this means in reality is that the cost of gas and oil has shot through the roof, and the supply of basics like wheat is squeezed tighte enough to raise a blister.
For many of us on the ground, it means our finances are difficult to manage, especially for those losing jobs, becoming redundant or already heavily on credit. What to do?
The answer is to use technology to manage your finances for you.
These days, through apps, there are really clever ways to manage your money. At the basic level is what people call Personal Financial Management, or PFM. PFM analyses your financial transactions, and highlights where you are spending too heavily and saving too light. You need to spend smarter to live smarter.
However, this assumes you have income coming into your account and can afford to live. What happens to those who have no income or rely on a food bank? Do they even have access to a bank account?
For many years it has been clear that those with the least pay the most. If you are unbanked, have no apps, no access to PFM, what do you do?
UK government reckons that over a million citizens have no access to financial services. That means, in reality, that you have to do everything with cash and coins. The more privileged in this world can get loans or even have savings. Those in this crisis who do not, have to pay everything direct and, bearing in mind the current situation in the cost of living crisis, that is hard.
Any solutions out there?
Well yes. Thanks to the rise of technology in banking, there are many new services that can help. Serivces like Wise, who offer pure payment services without requiring a bank account. Services like Klarna, who allow you to Buy Now and Pay Later. Services like Coinbase, who can offer you a cryptocurrency account, even if you only have a few pounds and, from that account, allows you to make payments using bitcoin or other coins you like.
The world is changing, so don’t get down about a lack of access to online financial services. Every single day, access is growing. You need to know where and look for it.
Finally, the vision of some – me – is that money will end up looking after you and you won’t need to think about it. Your intelligent financial provider will tell you where your money is, how it is being used, the future outflows and inflows to and from your account, where your risks are, and more.
These developments are not final, but an ongoing evolution of financial services that, at the end of the day, will include everyone. In fact, within the next ten years, you will no longer think about money as money will think for you. In other words, money becomes intelligent thanks to the integration of money with artificial intelligence. That should help everyone live a better life or, at the basic level, that is the aim.
Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...