What’s Next For Digital Finance?

 

The last few years have seen unprecedented changes in the way we handle our money. While on the face of it little has changed in the banking system, advances in digital technology are slowly but surely spearheading a revolution not only in the way we use our money, but the way in which we think about it. The most recent innovation to hit the market – contactless payment – may herald a new dawn in money interfacing. What could be next for digital finance?

Why Does It Matter?

Does it really matter how, precisely, we transfer our money from customer to vendor? So long as it gets from one to the other effectively, what’s the big deal? Actually, the format of your transaction – particularly the format in which you pay – does in fact have quite a large psychological impact. We’re far more likely to make big purchases using cards than we are with cash – and that’s not just because people don’t tend to carry large wads of cash around! Cash is our physical money. When we pay with cash, we can physically see our money decreasing. This is not the case with cards. It feels less like ‘real money’ when we pay for things with cards. For the same reason, payday loans and the like which can be approved over the internet frequently feel like less of a responsibility than those which you have to meet a lender face to face for – leading to a surge in irresponsible borrowing (and lending!) not so very long ago. Unsurprisingly, this psychological spending quirk is used to advantage by retailers and bankers, who want to keep us spending. However, now that we’re getting wise to the fact that card payments involve just as much ‘actual’ money as cash payments, banks and other authorities are sniffing around for new ways to make parting with money seem less painful. Contactless payment is just one way in which they’re doing this. The digital world is likely to see more and more financial innovations in the very near future.

Goodbye To Cheques, Hello To Cyber-Transfers

It’s not just the capitalist machine which requires novel ways of paying. Digital finance has made life a lot easier for many independent entrepreneurs to reach faraway customers and be paid by them very quickly indeed. Platforms like PayPal became ubiquitous extremely quickly  once their potential was realized – and as the world becomes increasingly digitized, they’re likely to go from strength to strength. If the banks don’t take them over, that is. Banks are well aware of the missed financial opportunities inherent in all of these cyber-transfers. While the money may ultimately end up in a bank account, PayPal are taking a substantial cut along the way. Banks currently remain invested in the outmoded cheque-clearing system (which gains them plentiful interest) – but this won’t be the case for long. Cheques  are being phased out in the UK in 2018 and other nations are likely to follow suit. It’s likely that the intervening years will see banks making big, PayPal-esque changes to their digital money transfer systems. Not everyone can use BACs systems to digitally transfer money, but everyone can use PayPal. Expect to see banks muscling in on PayPal’s territory by making their digital money transfer systems simpler and easier – potentially through apps and the like.

Wearable Technology

Everyone’s talking about wearable technology right now. It’s supposed to be the innovation of the future, keeping track of everything from our state of health to our social lives. We all know that a lot of confidently made future predictions get kyboshed by something completely innovative sweeping in from the left field. However, at the moment, wearable technology looks to be a reasonably safe bet so far as future digital development is concerned. The advance of contactless payment means that one need no longer be confined to a card in order to pay. Indeed, one can attach a ‘digital wallet’ interface to almost anything. Barclays are already using a ‘bPay’ system in the UK, whereby one can have one’s ‘digital wallet’ in a wristband, a fob, or a sticker which can be attached to whatever the owner pleases. Some ultimately see such interfaces being integrated into our bodies via chips etc which could be scanned. Whatever the ultimate destination of this technology, it seems pretty clear that the way in which we pay for things is about to change rather drastically!

Author

Helen Young

 

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The Good, The Bad, and The Scary Of Wearable Technology

In Isaac Asimov’s “I, Robot” novels, he shows us a world where technology supersedes established social norms. In his books, nudity is fine as long as it is viewed remotely. As in his fictional worlds, mobile technology and the Internet are changing our culture.

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Tragedies related to cyber-bullying have hit the headlines but the more subtle influences to our world may be more important. Microchips in children, voice controlled devices, and wearable technology are altering the way we communicate and interact, maybe to the detriment to our society.

The Problem Of Facelessness

The key to cyber-bullying is the cyber-disinhibition effect in which people do not have visual cues to moderate their behavior, reports researcher Michelle Wright. When talking face-to-face, a little nod or a squint of the eye gives the speaker micro messages, telling him to continue or change the subject. Digital messaging strips us of these meta-messages. Wearable technology, like Google Glass, brings this to a new level. A user can communicate with a person, even show that person what is being seen, and still lose the important parts of body language. This changes cyber-bullying, which is repetitive and premeditated, into peer victimization that is a malicious social behavior, reports the National Center for Biotechnology Information. In other words, we are transforming our online culture into one where users care nothing for their peer’s online reputation.

Privacy Is A Myth

English: A flexible Lilypad Arduino, designed ...

English: A flexible Lilypad Arduino, designed to be incorporated into wearable technology. (Photo credit: Wikipedia)

Maybe the loss of privacy and anonymity are trade-offs for the benefits we gain from this type of technology. Wearable tech is more than just Google Glass. There are fashionable medical devices that monitor heart rate and vitals in people with high risk conditions. Others give physiological information for athletes. All of these transmit information and, in the wrong hands, this information can be detrimental.

Micro-chipping for children and electronic emergency bracelets for the elderly have obvious benefits but they also place people at risk of privacy violations. One of the greatest issues is that these portable devices can be hacked without the user’s knowledge. With a flip of a switch, a device designed to stop pedophiles becomes a menu to find the child that is alone.

Balancing The Good With The Bad

Like most scientific achievements, wearable tech is neither all good nor all bad. There is a balance that needs to be struck to get the benefits of the tech without falling victim to predators. The cyber-security experts LifeLock have all kinds of good advice for protecting yourself from identity theft. Many of these ideas can be applied to wearable technology use also. One of them is to be a little bit wary. If you are using these types of devices, then know the risks. Understand the consequences of your system being hacked and have a contingency plan. Do not place all of your faith in your technology. When you see someone using wearable technology, remember that they can use it for unsavory purposes. If a person can see it with the naked eye then he can record it with a digital device.