How Is Technology Impacting the Finance and Banking Sector

Technology has overridden our lives like never before and not only in the field of aero science, medicine but also in finance and the banking sector. Fintech has revolutionized the way businesses are conducted in the current times. Those who want to stay ahead of the times have adopted technology in finance wholeheartedly but it is not all rosy. Here is how the biggest impact of technology is feeling in this sector.

The disappearance of human customer service personnel: The customer service is the backbone of a good business and hence banks and institutes employed and trained their staff to add value but with fintech taking over things are not the same anymore. Nowadays you get to interact with a chatbot that is interactive and intuitive and smart. As a result, the need for a human representative has disappeared.

Physical banking a thing of the past: What was once a major part of one’s weekly or monthly routine of going to a brick and mortar building and interacting with other humans is also disappearing slowly. Now people can bank anytime from anywhere without even a thought from their handheld devices. It has become extremely simple to transfer and receive money without an effort or the bank knowing who their customers are.

Fraud detection easier: Previously staff was trained to identify fraud and investigate it but with artificial intelligence taking over every aspect of finance, fraud detection is ahead of its times. These machines are capable of tracing the history and detecting a pattern in no time at all.

Thus, we see that with technology the number of human interactions in the industry has come down. Organizations are relying on machines which are prone to fewer mistakes and economically more viable. The biggest concern at this point is that due to technology it is hard to know a person on a physical level and hence to judge their true nature. Therefore, there is an emergence of the video identification business to overcome this drawback in an otherwise promising future to the finance world.

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Payday Loans – Everything You Need to Know

A payday loan, just as the name spells it out, is a small term loan that will help you stay afloat until your next payday. The loan amount is processed to your bank account directly almost immediately and you are required to repay it when you get your next paycheck. Alternatively, if the amount borrowed is higher than your paycheck then you could extend your repayment term to maybe three months based on the terms laid down by the lending institution.  Check out the different loan amounts and loan terms in addition to where you can get them at

Payday Loan Basic Rules

However, before you take a payday loan, make sure that you:

  • Have a steady income
  • Have an active bank account
  • Never miss any repayments
  • Borrow only what you need
  • Always read the terms and conditions of the loan, which tends to vary from one lending firm to another

Are Payday Loans Regulated?

Payday loans come under the scrutiny of the Financial Conduct Authority (FCA) that frames rules for a payday loan. The good news is that, as per the latest law, payday loans are capped at a certain limit that protects borrowers from being looted. The FCA has set limits on the amount of interest that can be charged per loan amount and on the processing fee that the lending firm charges the applicant. Hence, no borrower will have to pay twice as much as he/she has initially borrowed in the form of a payday loan.

When should you consider taking payday loans?

Payday loans should be taken only during an unexpected financial emergency that may occur once or twice in a year. For instance, if you need to get your car repaired after an accident, pay a sudden hospital treatment bill, get some home improvements done, or pay for your child’s tuition fee, you could then apply for a payday loan.

However, if you are knee deep in monetary problems and you resort to taking one payday loan to cover up another and so forth, then payday loans are not an ideal solution for you, as this will only land you in more financial troubles.

How to apply for a Payday Loan?

In order to apply for a payday loan, you need to:

  • Meet the age criteria for which you need to furnish a copy of your date of birth
  • Provide details of your bank account
  • Provide proof of your income
  • Furnish a valid contact number

Once you have all the necessary documents, you could apply for a loan either by visiting the lending firm or by applying online. With online applications, payday loans are processed faster and easier.

Disadvantages of Payday Loans

  • These loans have higher interest rates, which makes borrowing more expensive.
  • Moreover, these loans are linked to a small fee, which adds to your expenses.
  • Missing a repayment amount will land you in a lot of trouble including lowering your credit score. It will also lead to accumulated loan fee as well.
  • Additionally, if you do not have sufficient funds to make the repayment, then you could face charges for getting the security cheque bounced.
  • Further, the defaulters of payday loans will never be allowed to borrow money in the future.

Alternatives Options to Payday Loans

You could try some of these other options in case you do not want to take a payday loan such as:

  • Saving up cash for emergencies in your savings account either in the form of liquid cash or breakable fixed deposits.
  • Borrowing cash from friends and relatives.
  • Borrowing money from other mainstream lenders.
  • Getting a personal loan from your bank.
  • Using your credit card to take a loan.
  • Making use of the overdraft facility linked to your current account to borrow small amounts, in case you have a current account.
  • Taking up an extra part-time job.
  • Enquiring if your workplace provides small term loans at reduced interest rates.

What to check before selecting your payday loan lender?

However, if you must opt for a payday loan, make sure to check for the following conditions:

  • Check for lenders that charge no hidden fees
  • Does not ask you for any collateral
  • Processes loans instantly
  • Have an online application process
  • Charges lower interest rates and reduced APR
  • Offers you flexible funding
  • Offers flexible repayment terms
  • Protects your privacy
  • Registered with the FCA
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