Are you still saving under the mattress? Learn about the types of financial technologies that can help you.
4 min read
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- Today there are different types of fintechs to help improve personal finances. However, not all are available in the Mexican market. Even so, companies strive to include elements to improve financial management.
In Mexico, “the lack of financial culture has led many Mexicans to continue to save“ under the mattress ”and that their finances are not good as the lack of basic financial literacy hinders the ability to apply it, leading to people using informal Savings and credit methods and even systems that can put their wealth at risk, ”warns the Consultative, Scientific and Technological Forum (FCCyT) in a study on financial literacy in Mexico.
The evidence is that only 47% of adults in Mexico have a bank account and 68% have at least one financial product, according to the 2018 National Institute of Statistics and Geography (Inegi) survey on Financial Inclusion (ENIF).
In contrast, Mexico is a country with very high levels of access to the Internet (70.1% according to the Federal Telecommunications Institute) and mobile devices (75.1%). So there is a need to get involved financially and there is the means we have technology for that, but we haven’t had the how.
In this market, fintech companies saw an opportunity to redefine the population’s concept of financial products and promote their use through efficient, accessible and user-friendly products. It wasn’t a lack of demand, it was a lack of supply of flexible, easy-to-use financial services available to users.
Types of Fintech for Personal Finance
Today there are different types of fintechs to help improve personal finances. However, not all are available in the Mexican market. Even so, companies strive to include elements to improve financial management.
In general, these fintech companies are characterized by three elements: speed of their operations, lower costs and access that are not limited to one region and schedule. Some types of these companies are:
Alternative financing. These companies are responsible for providing credit, the plus side of which is that they have lower interest rates than traditional banking and have fewer requirements. The credit can be requested through the company’s website or application. The response time is shorter than with banks. Some offer apps that allow you to manage payments and schedule them by date, among other things.
Image: Micheile Henderson via Unsplash
From means of payment and electronic channels. This refers to movements like payments, transfers, and purchases. And although there are already banks in the country that offer these services through their electronic channels (website or app), fintech companies have gone further and offer services such as savings accounts that allow payments to be regularly scheduled and set. Gates; Expense management, meaning you can set a cap from time to time and include fixed debt to better manage monthly, weekly or daily expenses, among other things.
Personal financial management and asset management. These are clearly focused on advising the user to make better use of their money. They diagnose their financial situation and offer alternatives to pay off debts, improve savings, and discontinue services such as insurance or loans. That is, they act as a virtual financial advisor.
As with any digital product, certain precautions should be taken before discontinuing these services. Hence, it is important to check that they are legitimate fintech products. This is done very quickly with a search on their website. You also need to check if they are mentioned in the media or reviews, this will help us know if they are not an illegal company.