TMCnet Feature
September 17, 2020

Mirella Mordoki Explains How Technology Has Impacted Financial Management



Financial management is not something everyone has in his or her skillset. In fact, financial literacy is not widely taught in schools, with only some states requiring high school students to take a course on the important subject. 



But due to the rise of technology, managing money has become simpler in some ways, notes Fullerton, California entrepreneur Mirella Mordoki. With digital apps on mobile devices, almost anyone can perform online banking and even manage their investments in real time without an advisor, she adds.

While the average person has more digital tools to manage their own finances, the financial industry has answered back by modifying its offerings in some cases.

Rise of Robo-Advisors

Relying on a financial expert to invest money wisely is no longer the only option, notes Mirella Mordoki. As the name suggests, robo-advisors are quickly becoming the norm — they're automated investment management tools that build a portfolio based on risk tolerance and financial goals.

One of the appeals of a robo-advisor is having investment updates in real-time, rather than scheduling a meeting to go over how the portfolio is performing. They emulate tasks previously handled by humans using advanced algorithms and can manage a portfolio on an ongoing basis with little interaction.

Typically, robo-investor platforms charge a lower fee than financial institutions, while having lower minimum balances for entry. Some banks have responded by offering virtual access to advisors at a lowered fee, who can help with more detailed financial planning. However, it was estimated in 2016 that the financial industry could lose close to 2 million jobs due to financial technology (FinTech) replacing them.

Less Reliance on Traditional Loans

While interest rates in the U.S. are at record lows, securing a loan or mortgage through a traditional financial institution is currently not an easy proposition as banks have raised the bar to qualify, explains Mirella Mordoki.

However, technology might allow some people to sidestep getting a personal loan through a bank. For example, there is now peer-to-peer (P2P) lending through websites, which connect individuals to borrowers directly without a middleman.

Meanwhile, technology has also solidified crowdfunding, which allows a person to raise funds for a cause through collective online donations.

Mirella Mordoki on Evolving Currencies

Many people (and businesses) are avoiding cash exchanges (even prior to the pandemic) which carries its own negatives and positives — one positive being that cash limits how much one can spend at a time, rather than easily paying electronically, notes Mirella Mordoki.

While more people are adopting cryptocurrencies that sidestep mainstream banks, the technology that drives most of them — blockchain — will continue to disrupt the financial world. For example, traditional institutions might be cut out of transactions due to smart contracts using this technology in real estate.

Technology will continue to play a massive role in how people manage their investments and spend and save money on a regular basis and the financial industry will continue to evolve to keep up, explains Mirella Mordoki.



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