Last Modified on February 27, 2020

In this digital age, economies all over the world are being digitally fueled. The new digital economy is a dynamic, global network system of economic activities, commercial dealings and digitally-improved interactions. With the advent of big data, artificial intelligence (AI), automated computing, robotic automation and more, economies are not only smart but also agile and flexible. It is the era of new-age technology and you cannot deny the advancement and the sheer intensity with which technology has penetrated every inch of our everyday lives, even the way we plan and operate our investments and financial planning. Among other aspects, the impact of the new digital economy on finance is perhaps the most profound. It is wiser to understand and embrace the modern aspects of financial planning in the new digital economy, because the future is here.

More Inclusive Financial Planning

Financial planning in the new digital economy has become more inclusive than ever before. The usage of smart technology has led to the development of an ecosystem where all consumers and markets participate on a given scale. This is advantageous because it discourages monopolies, promotes smaller players, allows market forces to govern prices, eliminates middlemen, and provides investors with broader access to financial planning options and services.

Enhanced Ease and Accessibility

The era of the cumbersome paperwork and piles of files is long gone. In the new digital economy, financial planning has become easy and more accessible. Whether it is financial advice, investment options, insurance, loans, or more, anything and everything is available within a few clicks. Smartphones and the internet have changed the entire facet of financial planning. You have mobile banking apps, security apps, mobile money, e-wallets, and so much more. In fact, with the introduction of online, government-approved identification proofs, consumers can now conduct authenticated transactions and buy financial plans more conveniently and securely.

This is very helpful for consumers since it promotes financial planning for the present and the future.

Supportive and Open Regulatory Environment

As digitization and technology have penetrated the financial planning world, the regulatory environment has become more open and supportive. Whether it is the co-existing of banks and non-banks, government approved digital IDs, digitized government-to-person payments, ease of international transactions, availability of loans, digital financial assets, or more, the regulatory environment has become adaptive towards the changing digital economy.

Improved Customer Experience and Better Service Delivery

The legacy systems of the new digital economy have enabled financial planning to provide more value to customers by offering options as per their unique needs, risk-taking capabilities, and income potential. Moreover, since almost every aspect of financial planning is digitized in the current times, the service delivery is also more advanced. Presence of better communication networks has fastened the processing of insurance claims via online platforms. Digital content has become more exhaustive, which along with artificial intelligence has led to improved customer experience and lower commission in the product. Introduction of robo-advice has promoted better intermediation and claim management in the insurance sector. Robo advice has led to the development of financial plans for every goal of the customer such as retirement, protection, estate planning, health, safety, etc. Additionally, it has been observed that many customers are more comfortable discussing privacy matters in such scenarios rather than with a person.

Reduction of Errors and Enhanced Safety

Since everything is automated, financial companies are managing their operations more effectively. Moreover, since everything is out for the customers to see and analyze, the chances of error are significantly reduced. You can check ratings and reviews before investing, seek financial advice, and do so much more online. Digitization also reduces the possibility of cyber risks and helps to minimize errors. New age innovations such as Blockchain have led to distributed communication which has enhanced cyber security. Apps are enabled with digital advisors, algorithms, and machine learning, which have helped customers in better financial planning.

Targeted Information and Informed Decisions

In the new digital economy, financial planning is based on more targeted information and hence, the corresponding decisions are much more informed than before. With the presence of credit scoring, statements and billings, automated SMS, etc., people are more equipped to make informed decisions. In the olden days, complex laws and lack of knowledge of procedures and policies made financial planning a challenge for some people. However, with cognitive computing and real-time updates on rules and implementation of policies, effective compliance has become a reality.

Proactive Assistance and Quicker Redressal of Grievances

One of the most helpful modern aspects of financial planning in the new digital economy is the rate at which consumer grievances are solved. Today, cognitive computing has helped consumers have a quick, interactive conversation interface powered by artificial intelligence such as Chatbots. This has helped enhance consumer services and CRM. Additionally, the presence of robo-advisors has provided proactive help to consumers by providing suitable investment suggestions based on data readings.

To sum it up

The modern aspects of financial planning in the new digital economy are more customer-friendly, dynamic, comprehensive, simplified, and supportive. With the profound impact of the changing technological and digital environment in the financial sector, financial planning is bound to experience significant changes even in the coming years. In fact, it is expected that in the next 5 years, the planet will experience the biggest change ever with more than 3 billion people accessing the internet through mobile phones. In such an environment, it is a necessity for the consumers to be aware and open towards the changing scenario, and to expect significant changes in the near future of financial planning.

The future holds guaranteed simplified contracting processes, better ways of addressing needs, tailored policies, improved plans and coverage, and a lot more. So, to ensure that you enhance your long-term value and to be prepared for the future, you can reach out to credited and acclaimed financial advisors and take small steps to understand, in depth, the modern aspects of financial planning.