Technology and Personal Finance

Technology is always developing and changing. New technologies surface to help improve connections, offer entertainment, support wellness, and much more. Technology has increased access to information and made many things more convenient.

“Fintech solutions like peer-to-peer financing, AI-based financial management solutions, online identity verification (KYC solutions), open banking and mobile payment systems have revolutionized the way people manage their finances today,” Damien Martin Shufti Pro Marketing Executive says.

Technology has affected personal finances in the following ways:

  • Opportunity
  • Convenience
  • Financial literacy
  • Security


“Some of the positive aspects of financial technology is the access it provides to those who previously did not have access to or only had limited access to financial services. The gap between developed and developing nations is closing, and technology has helped bridge that. Access to money and investment is key to initiate growth and there are a multitude of solutions ranging from traditional banking to microfinancing to crowdfunding which have been enabled through financial technology,” says Lauren Wilson of Voleo.

Broadly speaking, technology is leveling the playing field when it comes to accessing investment opportunities, banking, and financial knowledge.

“Investing in the stock market used to just be for the wealthy people, or at least people who could afford to put a lot of money away. Thanks to apps like Acorns, Betterment, and Robinhood, a person of nearly any income can invest and try to grow their money,” advises Bill Walsh, finance writer and contributor to

However, this broader access also puts the education and decision-making responsibility even more on the investor instead of sharing the burden with a financial advisor.

“There is a catch to this however. Novice investors using Robinhood for the first time will often start purchasing stocks without fully understanding what they're doing. Robinhood doesn't charge a commission, making trading affordable. But you don't get some of the perks that commission money pays for, like personalized advice about how you should trade to meet your goals. Then they'll sell at the first sign of trouble and swear off the market forever. This "democratized" market could mean more fear based selloffs, and increased overall volatility.

Acorns makes saving money super easy and convenient by investing spare change. It sounds like a great setup. However, the $1 a month fee may sound minimal to the average person, but that dollar can really eat into your returns when you're investing with such low amounts,” says Walsh.

While there are still hurdles in leveling the playing field, like ability to use or access financial technology and financial education, it has demonstrated its capacity to offer increased access to financial services globally.


“Technology has greatly changed financial culture. The app market has created a wealth of programs that can automatically save and even invest your money. You no longer need a calculator, some scrap paper, and a large coffee to properly manage cash. Banks and other financial institutions are expanding their mobile capabilities. Because it’s more convenient to do so, more people will be properly watching over their finances. This will lead to smarter money management and better spending decisions. Just the ability to automate your savings will mean people will have more stored away for a rainy day,” says Walsh.

Technological developments have made it easy to monitor spending, bank accounts, and credit cards online and from mobile phones.

Most employers offer direct deposit for paychecks, which means that you can access your money faster and avoid fees associated with cashing a check or the delay from waiting for it to come in the mail and then to deposit it yourself. If you’re depositing a hard copy check, most banks have mobile deposit, which makes the deposit process instantaneous.

Lots of mobile apps help people set a budget and track their spending. This makes it simple to compare how you planned to spend your money with how you actually spend your money quickly. Some online banks also have budgeting trackers.

Technology has also reduced operational costs for banks. Technology has also allowed banks to catch fraudulent charges on cards in real time, which helps to reduce the impact of lost or stolen cards.

“FinTech has been monumental in helping banks and financial institutions make their data entry, compliance and financial management systems more efficient and productive. With advanced AML compliance systems, are now potentially capable of saving the banking sector billions of dollars of fines and operational costs. Advanced risk analytics and digital KYC procedures are now capable of mitigating the risk of identity theft and credit card fraud,” adds Martin.

woman scanning her phoneHowever, financial technology isn’t just about convenient budgeting, saving, and theft protection. It’s also about convenient payment options.

Most companies and online banks allow you to set up automatic payments for bills. This makes it easy to stay ahead of bill due dates and reduces the memory load — you don’t have to remember to pay your bills because you have automatic payments set up.

“Technology certainly has made it easier and convenient to enable people to borrow and spend…and spend. Many components of Fintech focus on the technology side to make a process easier, but it is important to remember that there is still a financial side too. The vast majority of technological innovation or “disruption” is to find ways to get people to spend money, not save it. With the ever growing consumer debt burden in the United States there needs to be a realignment to truly educate people on how to manage their personal finances, retirement, and investment opportunities,” says Michael Micheletti, Director of Communications at Freedom Debt Relief.

Apps like Venmo and PayPal have made it convenient to send money to friends or family members.

“Consumers have options to pay digitally in stores using a mobile wallet, or transfer money through financial apps. The acceptance of such modes of payment at brick-and-mortar stores has increased the sales,” adds Mangala Bhattacharjee, Research on Global Markets Senior Manager of Marketing and Communications.

Because financial technology has lead to increased spending, it’s essential for people to watch their finances carefully and understand them.

Financial literacy

“In financial services today we are seeing technology applied to everything from payroll automation to investment support. Many companies are incorporating technology, machine learning and AI into their website and applications to help consumers increase their financial understanding and improve decision-making. The premise for many of these technological innovations is to create opportunities for those who lack the education and experience to better control their finances. From a culture perspective there is a sense  of a “set it and forget it” mentality as we automate everything from paycheck deposits to paying our bills and begs us to ask the question do we understand how we manage money,” advises Micheletti.

The more work we divert to technology, the less we think about it. This practice can free up brainpower to focus on other things. While this is nice and convenient, it can also be harder to be fully aware of what happens with our personal finance.

In a 2019 study, Freedom Debt Relief found that 55 percent of Americans checked their paystub the last time they were paid. Just under half of those surveyed had not checked their paystub the last time they were paid.

Infographic courtesy of Freedom Debt Relief.

When people do check their pay stub, most look at the federal and state income tax withholdings.

Infographic courtesey of Freedom Debt Relief.

Before direct deposit, employees received a paystub along with their paychecks. Since the documents came together, it was easy to keep an eye on taxes and retirement contributions.

“Features such as direct deposit and automated bill paying don’t require human interaction beyond setting up the accounts. Consumers no longer look at a paper paycheck while standing in line at the bank to make a deposit. There is no longer a need to reconcile your checking account at the end of the month. It’s all done without thought or purpose. We aren’t paying enough attention, and it is having a drastically negative effect on the entire country.  Worst yet, it will be passed to future generations,” warns Bill Westrom, creator and co-founder of and co-author of Master Your Debt.

While companies still provide paystubs to employees, these are usually available online through the employer’s HR software. Looking at your payslip regularly helps you know how much you pay in taxes, contribute to retirement, and what you earn regularly.

Freedom Debt Relief’s study found that most people who looked at their payslip checked federal income tax, state income tax, and 401(k) contributions.

But it’s not that technology is bad. Many things that make our lives more convenient, also allow us to think less — even without delegating responsibility to technology.

Continuing with the example of payslips and tax withholdings, taxpayers paid the government directly instead of going through their employers before World War II. During World War II, the government changed the tax paying method so that employers would pay taxes from their employees’ paychecks before disbursing the earned income.

This change meant that the government got money faster and that taxpayers became less and less familiar with the total amount they paid in taxes and how tax law changes affected their taxes.

When we delegate tasks for convenience and efficiency, it’s important to stay informed by looking at payslips, account statements, and personal budgets. Recognize that technology offers a lot of tools to make managing finances convenient and to manage them instead of being passive.

“The most dangerous downside of technological advancements lies underneath control delegation. There is a huge gap between the result of some algorithm work and the understanding of the algorithm's logic. People take machines for granted and sometimes forget that machines are not yet capable of what humans are capable of in terms of logic. Thus, it is important to bear in mind that machines so far are only supplements rather than substitutes,” says Ruslan Gavrilyuk co-founder and President of Kepler Finance.

Realize the limitations of financial technology. Set financial goals and make plans to meet them. Hold yourself accountable for you spending at frequent and regular intervals.

It can be harder to budget when everything can go on a credit card that gets paid at the end of the month. Checking in on your budget weekly and assessing it monthly is a good practice in understanding where you’re sending money and start planning for how you’re going to use it. It will also help you avoid consumer debt.

Technology adds value and convenience to managing personal finances. However, all tools and innovations must be used wisely. As we continue to enter a digital finance world, it’s important to keep the valuable personal finance approaches that pre-date online banking and digital innovation.


“Online banking, payment applications and investment apps have, and will, continue to revolutionize the way consumers live within the financial world. This technology has enabled more visibility and convenience for both consumers and sellers. However, this convenience does come at the cost of security and regulation control. With the constant evolution and advancement of fintech innovation, the regulation setting cannot keep up. Consumers often express concerns about online banking and money management systems. In order to combat this, stay away from wi-fi usage with these sites and applications, keep your anti-virus software current and do your due diligence to set up security on your devices by changing passwords often and requesting text message confirmations,” suggests Jared Weitz CEO and founder of United Capital Source.

As financial tech has developed, hackers have become more adept at breaking in to steal information. Data breaches are becoming more and more common. Fortunately, security measures also develop and improve in tandem with hacker skills.

Companies that gather data invest in data security. Laws like the GDPR in the European Union regulate how companies acquire and secure data online.

“The downside to financial technology could be the increased sharing of user data across different channels. This makes the data vulnerable and prone to breaches. However, companies that observe strict data protection and cybersecurity protocols are less in danger of having their information exposed to breaches. On a personal level, people must be careful about sharing their personal information on unreliable sources and take good measures to protect their data online,” says Martin.

But it’s not just personal information that worries some consumers.

"People often worry about the safety of online banks. However, even if your money is "stored online" that doesn't make it more hackable. Traditional brick and mortar banks use online programs to keep track of their accounts as well. If an online bank is FDIC insured, your money is protected from run-on-the-bank situations and just as safe as it would be elsewhere," advises Claire Shaner, Best Company’s online banks expert.

Even with a company’s investment in security, data breaches happen frequently. Data breaches can result in identity theft and affect people’s privacy.

“Data security and vulnerability to malware attacks are the biggest downsides for financial technology. The banking sector is new to technology adoption and hence hackers sometimes find it very easy to breach through the gaps. As a result user data gets compromised,” adds Bhattacharjee.

phone with barcode on desk with coins and a pen

However, technology has become common place and vital for functioning in many societies. Since it’s more inconvenient not to use technology, how can people protect their finances and other personal information?

“Even with the best in security software, you can never feel 100 percent safe. We simply put our trust and faith in them to protect us. Unfortunately, that’s not always the case. Short answer: pay attention and keep your eye on the ball so you can spot anything out of the ordinary. Ultimately it’s our responsibility to pay attention to and protect our information,” says Westrom.

Everyone should take measures to ensure that their data and identity are protected. This can start by taking steps to secure your home Wi-Fi. You can also purchase a VPN to help secure your data. This is an especially good idea if you’re accessing your financial information online.

“Adopting secure browsing methods is the most basic thing that people need to make sure of. It’s also important that people change passwords of financial accounts, Wi-Fi, etc. frequently. Avoid using free internet to public internet to access financial information as the public internet networks are the easiest to breach,” says Bhattacharjee.

Being careful with your online presence is also a good idea. Be selective of where, how, and with whom you share your information online.

Martin shares some additional data security tips:

  • “Beware of phishing scams — never click on links provided via email; they tend to have malware. Banks or companies rarely send out emails inviting customers to use new products or services or offer them discounts or gift vouchers.
  • Beware of social engineering scams — banks, governments and online retailers never ask people for their personal information (ID card numbers, account or credit card numbers, passwords and PINs) via email, phone calls or direct messaging.
  • Keep your personal information secure — avoid giving out any potential identity information on social media platforms. Block your stolen credit card as soon as possible and report the theft.”

The bottom line

Financial technology has made many processes faster and more convenient. It can make it easier for people to monitor their spending and create budgets. It has also helped reduce the cognitive load of remembering to pay bills.

However, it’s important to capitalize on the convenience financial technology brings to keep your finances and spending habits in good shape. This can mean setting up an automatic transfer to your savings account and automatic bill pay. Be sure to revisit your settings at regular intervals to stay informed about your finances and make adjustments as appropriate.

“Research and education are the only solutions. It's up to people to do their due diligence before handing over their hard earned money. All these new apps means more of our information is floating out there in cyberspace. Times today require you to keep a closer eye than ever on your finances, which in a strange way, these apps are making us do,” says Walsh.

While you capitalize on the positive aspects of financial technology, don’t ignore the risks. Take steps to keep your information secure online. Be selective of the companies you share your personal and financial information with. Hold yourself accountable for your spending and stick to your budget.

Making the effort to understand and track your finances and keep your information secure will help you use financial technology wisely and to your advantage.

For more insight into how technology is affecting personal finance, check out Knowledge@Wharton High School’s podcast.

Top of Page chevron_right
Was this content helpful?
thumb_up Yes thumb_down No

The Top Debt Relief Companies

Related Articles

Get Our Newsletter - Be in the Know

Sign up below to receive a monthly newsletter containing relevant news, resources and expert tips on Debt Relief and other products and services.

We promise not to spam you. Unsubscribe at any time. Privacy Policy