The Evolution of Digital Banking (Part 3): The Fintech Revolution and What It Means for Introverts

TPart 3 of my series on the evolution of digital banking focuses on the rise of fintech and how digital banking tools can help introverts achieve financial freedom. If you missed Part 1, where I explored how ATMs empowered introverts, or Part 2, where I discussed the shift to online banking, feel free to catch up.

In the previous posts in this series, I touched on how ATMs built on traditional banking to provide services in a way that conventional brick-and-mortar branches never could. These services evolved into online banking by leveraging the internet to increase accessibility and expand the range of services they offered.

These posts were inspired by my first banking experience and how, as an introvert, that experience left me yearning for a way to bank that aligned more with my personality type.

These advancements allowed me to control how I managed my money, keeping it on my terms. The valuable insights provided by the real-time history of my transactions allowed me to observe how my cash flowed in and out of my account. This visibility enabled me to make more thoughtful decisions and plan my financial future.

They also allowed me to avoid the overstimulating banking environment and bank from my couch, where I am most comfortable.

As we explore how banking has evolved, it's essential to understand what fintech means in this context.

What Is Fintech?

Fintech is a term most of us have been hearing only in the last five to ten years. However, its origins can be traced back to the late 1960s when an article by the Boston Globe highlighted a new company, Fin-Tech, prepared to invest up to $200,000 in technology-based financial companies to facilitate the merger of finance and technology (Boston Globe, 1967).

While this may seem like small potatoes compared to the billions of dollars fintech startups raise today, it marked the beginning of a financial revolution. In comparison, Klarna, a "buy now, pay later" fintech, has raised over $4 billion since 2010 from investors, including Sequoia Capital, BlackRock, and even Snoop Dogg (Tracxn, 2021).

With a clearer understanding of fintech, let's delve into how mobile devices have become the cornerstone of this transformation.

Fintech and Mobile Devices: The Bridge to Greater Financial Access

Fintech now reaches nearly every corner of the financial world, bringing innumerable services literally into our hands via mobile devices. Always at our side, these devices are almost ubiquitous and contain much of the information and data that define who we are.

They are well-positioned to seamlessly provide us access to a wealth of financial services at the tap of a screen. These tools represent next gen personal finance, revolutionizing how we manage money digitally. Mobile devices have acted as the bridge between online banking and the mobile payments revolution, allowing fintech to flourish, especially for introverts.

One significant enabler in fintech was the rise of mobile payments. Let's examine how this innovation has changed the way we handle transactions.

The Rise of Mobile Payments: Key to the Fintech Revolution for Introverts

Another innovation that emerged alongside some of those I mentioned in my last post was the introduction of contactless payments via RFID. In 1997, Mobil Corporation introduced its Speedpass, and I was among the first to adopt it (Tampa Bay Times, 1997).

At the time, it was still reasonably uncommon for gas stations to offer pay-at-the-pump technology, which was only facilitated by swiping a credit or debit card directly at the pump via a magnetic reader. When the feature was available, the technology often failed. Either your card wasn't recognized, or the transaction failed.

Security concerns were also prevalent. More often than not, you ended up inside the station resolving the failed transaction with a clerk, which turned into a bigger ordeal than if you had just gone inside to pay in the first place. It's not a situation an introvert likes to find themselves in!

Speedpass, via a tiny dongle on my keychain, allowed me to dependably and conveniently pay for gas at the pump with minimal effort or stress. The only downside was that it was limited to Mobil stations. Even then, I thought: why couldn't this technology be available everywhere?

I always have my cell phone, so why couldn't I just have an embedded RFID tag to scan at the grocery store, car wash, McDonald's, or anywhere else I might be making a payment?

Nearly fifteen years later, this dream was realized through a different technology, Google Pay utilizing NFC (Vending Market Watch, 2011), and a much more advanced device, the smartphone. Apple Pay followed three years later (The Verge, 2014).

Mobile Payments and the Fintech Boom

I mention mobile payments here because they played a vital role in the explosion of fintech in our daily lives. For the first time, mobile devices provided us with a way to take in information from the world around us and push information about us back into it.

Along with additional cameras and sensors included in our devices, we are now immersed in a fully digital, interactive world. This advancement has led to the exponential boom in fintech in recent years.

Before this, most fintech advancements had been behind the scenes, and many still are. However, mobile devices allowed banks to leverage technology and fully push products directly to customers.

SoFi: A Standout in Consumer Fintech

No product exemplifies consumer-facing fintech better than SoFi. Founded in 2011 at Stanford University, SoFi, a portmanteau of "social financing," initially provided an alumni-backed solution to reduce student loan costs by 3 to 4 percent (Time, 2012).

However, SoFi quickly evolved into a full-service financial company, leveraging a startup mindset, innovative technology platform, strategic acquisitions, and industry partnerships. These offerings are a prime example of next gen personal finance, helping users streamline financial management with cutting-edge technology.

SoFi offers a wide range of services, demonstrating why it's a leader in consumer fintech. Here's a quick review of SoFi's key offerings:

• SoFi Checking and Savings: High-yield, no-fee accounts.
• SoFi Invest: Stock and ETF trading, along with automated investing services.
• Loans: Personal loans, student loan refinancing, and mortgages.
• Insurance: Life, auto, and homeowners insurance through partner providers.
• Career and Financial Planning Tools: Access to career coaching and financial tracking tools.

Over the years, I've researched these products extensively to educate myself and support my wealth-building journey. As an introvert, I've found comfort in the security that many of these products provide. Still, I've always struggled with the overwhelming nature and cognitive load that managing these products places on me.

A few years ago, my father, with whom I shared a name, passed away, and this caused significant issues and confusion across many of my accounts due to poor legacy record keeping by various institutions and government agencies. I spent days and a considerable amount of energy on the phone and traveling in person to numerous institutions to resolve these issues.

The amount of time, stress, and likely money that could have been saved from having these services consolidated at SoFi is invaluable.

I can, and probably will, write an entire post on the individual services that SoFi provides and how they can help facilitate an introvert's lifestyle, so stay tuned for that. In the meantime, you can check out all of SoFi's products and sign up for your own account to see their platform in action and decide if it works for you.

Exploring Cryptocurrency: A New Frontier for Introverts

The last component is very much at the forefront of fintech: cryptocurrency. It is the complete merger of finance and technology, blurring how we think about money. Existing entirely in the digital world with no physical form, crypto is complicated for many to understand, let alone consider investing in.

The companies operating in the fintech crypto space are incredibly diverse, ranging from those that develop the underlying code of cryptocurrencies themselves, such as IOHK (for Cardano), Solana Labs, Ripple Labs, and the Ethereum Foundation, to those that build the infrastructure supporting blockchain networks, like ConsenSys, Chainlink Labs, Blockstream, and Alchemy, to platforms that facilitate crypto trading and investment, such as Coinbase, Binance, and Kraken. The SEC notes that crypto can be exceptionally risky and often volatile (SEC, 2021).

This may clash with the common misconception, including my own, that introverts are risk-averse. However, as Susan Cain points out in Quiet: The Power of Introverts in a World That Can't Stop Talking, introverts aren't necessarily more risk-averse overall. They tend to take more calculated risks than their extroverted counterparts. One study suggests that people with a specific gene linked to introversion take about 28 percent less financial risk on average than those with genes associated with extroversion (Cain, 2012, p. 162).

While I consider crypto significantly risky, I've managed my exposure carefully and taken calculated risks. I've made short-term trades on relatively small amounts of money during periods of high market exuberance and have timed the market well enough to make a profit. I also have a minimal recurring automated purchase of Bitcoin that happens biweekly, equivalent to about what I'd spend on coffee. But let's be honest, that trade-off doesn't always happen. The caffeine, at least, helps me accept the risk!

For introverts, crypto may seem daunting at first, but it's an area where patience and research pay off. Understanding how cryptocurrencies work, what drives their value, and the risks involved is vital to making informed decisions.

Crypto is an area where you can leverage your introvert powers, such as patience, focus, and an analytical mindset, to understand the risks and develop a strategy that fits your comfort level. That may mean staying away from it entirely, and that's okay, too.

Wrapping It All Up The Evolution of Digital Banking

This series has explored how the evolution of digital banking has progressively empowered introverts to take greater control of their finances. In Part 1, we saw how ATMs revolutionized banking by eliminating the need for in-person interactions. Part 2 examined how online banking expanded that autonomy with more flexible, remote options.

In Part 3, we've focused on fintech tools like SoFi, mobile payments, and cryptocurrency, which give introverts of all financial backgrounds the ability to personalize and optimize their financial strategies.

From simplifying investments and automating payments to exploring cryptocurrency opportunities, the fintech revolution provides introverts with the control, convenience, and financial freedom to manage their money on their own terms. Regardless of where you are in your financial journey, these tools offer solutions that meet your unique needs.

I'd love to hear from you if you've had similar experiences navigating digital banking or fintech as an introvert. Feel free to share your thoughts, stories, or questions in the comments below. And if you're ready to explore the benefits of fintech for yourself, check out the range of tools SoFi offers and see how they align with your financial goals.

Stay tuned for future posts, where I'll dive deeper into fintech's impact on introverts and explore more advanced financial tools that can simplify your wealth-building journey.

Sources:

1. Boston Globe – Fin-Tech Investing in Financial Companies
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2. Tracxn – Klarna Funding and Investors
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3. Tampa Bay Times – Mobil Picks Up the Pace with Gas Pump Gadget
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4. Vending Market Watch – Google Wallet Further Empowers the Smartphone
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5. The Verge – Apple Pay iPhone 6 NFC Mobile Payment
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6. Time – Student Loans for a Great Deal: Borrow from Alumni
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7. SEC – Crypto Risks and Volatility
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8. Susan Cain – Quiet: The Power of Introverts in a World That Can't Stop Talking
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