As an entrepreneur and an angel investor, I get really excited about the future of personal finance.
As new technologies develop, from cryptocurrencies to virtual wallets, I see advantages for businesses. I also see opportunities for everyday Americans and our families to make--and keep--more of our own money.
In meetings with financial technology startups, I'm seeing so many incredible new developments on the horizon. Any innovation that improves how we live, shop, and pay sets off alarm bells--of the good kind--in my friendly neighborhood Certified Financial Planner brain.
Here's a sneak peek of why I think the next five to 10 years are going to make making money easier for all of us. It's thanks to these five emerging technologies:
1. Blockchain and Cryptocurrencies
The world of cryptocurrencies is still being forged. But there's no doubt about it, cryptocurrencies could invent totally new ways of making money that we cannot even see today.
Because they're decentralized, cryptocurrency systems could let us all potentially own our own data. That could mean Facebook doesn't make $43 a day from you; you could. This could open worlds of possibilities for everyday Americans.
The benefits are tangible for non-business-owners, too. Imagine you're a woman living in the United States who sends money to her family abroad, to make sure her kids have money for food. Using cryptocurrency, you don't have to pay 8 percent to the Western Unions of the world. That number could go down to half a percent, and more money goes to the people who actually need it.
2. Voice Technologies
Within three years, about 40 percent of consumers will use a voice assistant instead of an app or website, according to one study. Forrester Research predicts that by 2022, 50 percent of homes will have a smart speaker.
Banks are beginning to allow us to speak our instructions, instead of typing or visiting a physical location. Using Amazon's Echo (or any other smart speaker system) for banking could mean that other Alexa can alert you when your balance is low, or if you're spending over your budget in a certain period.
That's savings on overdrafts and a hands-free way to stay on track for all kinds of personal finance goals.
3. Mobile Pay
Hopefully by now we're all using automated bill-pay for our major expenses, from credit cards to mortgages. I'm looking forward to a world where all bills are auto-paid from our devices.
Anything that can make late fees a thing of the past--like the ability to schedule payments--is a win. Mobile pay could be the answer by taking human error (not to mention envelopes and stamps) out of the personal finance equation.
For small businesses, mobile pay significantly reduces the need to chase money down. An employee in the back office doesn't need to be processing invoices, which frees up human capital and, presumably, passes on that savings to customers. Plus, facial recognition software--available on the newest iPhones--means safer transactions and less money tied up when banks "freeze" your fraudulent charges while they investigate.
Here, companies are still wary of it. In China, facial recognition is ramping up--and could affect the way people shop, bank, eat, and ride. In some banks and ATMs, it's already rolled out. You don't have to carry a card with you; your face and some identifying data are all you need.
Though concerns linger about security, many insist it's better than a password. And anyone who's had their bank account hacked or credit cards breached knows it's a big money and stress drain.
4. Virtual Wallets
I'm going to be honest with you--I'm not sure when the last time was that I had dollar bills in my wallet. There are Millennials in my office who have literally never carried cash around.
How is this saving me money? ATM withdrawal fees are a thing of my past, for one. I can pay for dinner, get a cab, and settle up with the babysitter, all from my phone, thanks to apps like Venmo.
That saves me time, too. And, most important, every transaction I make is 100 percent tracked, so I can accurately analyze my spending.
You may have heard of this love child of insurance and technology, cousin to financial techology and one of my favorite innovations. As insurtech begins to grow, so do hopes for lower-cost options for consumers.
In-car sensors already track safe-drivers' performance and reward them. But let's say you're not only an exemplary driver, but also a clean-living fanatic. You drink only moderately, don't smoke, and have an ideal blood pressure.
Wouldn't it be great if your good behavior meant cheaper health insurance, thanks to a sensor that reports your vital stats back to your insurer? It's about time we started reaping the rewards of eating all this kale.