Keeping yourself informed on global and domestic trends in banking, investing, and the currant of the foreign market will help you and your family to maintain up-to-date financial literacy and make more informed decisions with your money. Freedom Debt Relief and its sister-company FreedomPlus, provide more than loans; they also aim to keep consumers as informed as possible. We’ve analyzed the economic climate and are here to present the facts to you on changes you may see in the coming years.
Advancements in financial technology
One of the largest areas of banking and investment development that American consumers are likely to see in coming years is the spread of financial technology (FinTech), originating from capitals of innovation like New York and San Francisco. Some FinTech has been in place for years (ATMs, banking apps, etc.) but financial technology is beginning to become even more developed and inclusive. For example, one of the first instances of FinTech that we are beginning to see become more and more ubiquitous is digital lending. For years, banks have been collecting consumer and business data on which types of loan applications come from the ideal lend recipient; programmers have written algorithms that allow computer programs to use both traditional (annual income, age, credit scores, etc.) and novel (website traffic, social media presence, etc.) data measures to instantly approve or deny loans based on the likelihood of an applicant to fit the ideal profile. Freedom Debt Relief has also found that a number of banks are also now considering introducing biometric account security measures. Biometrics intend to replace traditional password measures to keep customer banking information safe. While a password can be guessed by criminals, it would be much more difficult to hack into an account that required a retina scan, selfie, or fingerprint to access. Biometrics and digital lending are just two of the FinTech trends that the United States is expected to see in the coming five years- other develops in FinTech including customer data synchronization and the use of artificial intelligence are also on the horizon.
Consumers seem to be embracing FinTech advancements. A survey by The Financial Trend found that 71% of millennial consumers stated that they would prefer not to go to a physical banking location, preferring to do most of their banking and investment activity online instead. Similarly, consumer confidence in FinTech also seems to be advancing as well; 52% of consumers stated that they would be using some form of financial technology “in the very near future” when surveyed.
This advancement of FinTech should be expected to grow, and comes alongside a double-edged sword for small banks and credit unions. On one hand, digital lending allows smaller banks the opportunity to compete with larger banks for the first time in history by expanding their reach beyond those consumers who live in their immediate radius. However, as larger banks continue to spend large amounts of money developing financial technology, consumers may begin to leave smaller banks in favor of those with increased online and digital options, a conclusion supported by the large number of younger consumers who stated that they would prefer not to go to a physical bank if possible.
A slower hiring trend, but a rise in consumer confidence
Recent reports have indicated that, though the initial surge in hiring that was present at the beginning of the year has begun to slow down, Freedom Debt Relief and FreedomPlus cumulatively have found that employers reported adding 156,000 jobs in August alone. Average hourly earnings rose about 2.5 percent over the past year, but unemployment has also risen a bit, to 4.4 percent. Yet, despite this slow in hiring, consumer confidence also rose to 122.9 on the Consumer Confidence Index, meaning that a large number of consumer predicted positive economic movement in the future. This consumer confidence level may be influenced by this year’s rate of inflation, which was lower than expert predictions.
A depression in economic trends thanks to Hurricane Harvey
The damage levied by Hurricane Harvey to the Gulf Coast of Texas resulted in catastrophic losses to both consumers homes, businesses, and automobiles. This area is home to about 7.8 million people, and the Greater Houston GDP area alone tops $550 billion, consisting of about 3.3% of the overall GDP of the country. The Gulf region is also considered to be one of the rising economic hubs of the United States, which has accounted for about 6.6% of GDP growth since 2010.
The majority of the damage came as a result of flooding, and while most homeowners did hold insurance covering environmental damage, Freedom Debt Relief knows that research has uncovered that a large percentage of these home insurance plans may not cover the damage from Harvey because they do not cover flood damage. This means that homeowners (and consumers) will remain largely responsible for picking up the pieces after the storm; experts estimate that the economy of the United States as a whole will see a slight dip in activity due to the fact that the Houston area is a major hub of commerce in the southern part of the country. Home, automobile, and retail sales are also anticipated to see a hit as well.
While the area is expected to recover more quickly than other regions in the economic sector thanks to the area’s intensive capital-investment energy business, the rebuilding of homes will take a much longer time. This will likely result in lower levels of GDP growth in years to come.
FreedomPlus and Freedom Debt Relief are committed to keeping consumers informed on their economic and financial climate. For instance,if you are in need of a loan, they can help to keep you up-to-date on the trends and changes that will affect your payments and interest rates. Contact FreedomPlus or Freedom Debt Relief today if you are interested in learning more about the financial forecast of the United States, or you are interested in getting started with the loan that wants to help you build a better future.