The world of personal finance has been revolutionized by technologies, but in the next decade, there will be even more significant changes driven and enabled by developing competencies in artificial intelligence, machine learning and supercomputing. The way that consumers are thinking about and interact with finance is set to change in the following ways in the next decade:
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Interest Rates
Interest rates had been increasing at a sustained pace over the past decade, but obviously, the recent global crisis will change that in the short term. Hopefully, governments will try to rely less on Quantitative Easing and other monetary policy tools and more on fiscal policy, which many economists take as the lesson provided by the 2008 economic crash. If that’s the case and there’s a V-shaped recovery, interest rates may still rise after this blip, which will impact the growth rate, as well as the price of the dollar and most US assets.
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Innovative Loan Instruments
With the rise of fintech, there are likely to be innovative ideas driving the industry of payday loans. This could be in the form of using AI to assess the likelihood that a certain individual will be able to pay back money; giving more accurate and representative credit ratings and simply different ways that people can get loans. Collateral is always an issue, but innovations like highly-localized car title loans are cropping up that change the way people collateralize their assets; here’s a great article to car title loans in Leesburg, so you can see the ideas that are already changing the personal loan landscape.
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Democratized Financial Advice
With the spread of artificial intelligence, financial advice should become more democratized, as individuals can benefit from the economy of scale allowed by AI and make personal finance decisions based on large datasets. If the average American looks to invest their spare cash in a safe and intelligent manner, they should be able to help mitigate the crisis of retirement funding that’s being reported nationwide – less than half of non-retired Americans are confident they’ll reach their retirement financial goals.
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Simpler Financial Explanations
As financial products become less dependent on big banks and move over to technologies like applications, there will be a demand on both the consumer and regulatory side for finance transparency. This will mean that the average American personal consumer of financial products will be more informed and less likely to suffer from predatory practices, which can only be a good thing.
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Bearish Noise
With the advent of ‘fake news’ and the huge variety of different opinions flooding the airwaves, you can be assured that there will be a whole load of bears trying to talk down markets and make a profit from any consequent fall in customer faith. However, in general, bears do tend to be contrarian and in the long-run, more bull-minded investors prevail, so Americans will have to have faith in their investments and ignore the bearish noise; something that will be a lot easier when AI makes their decisions for them.
