The incorporation of forward-thinking technology is taking the finance world by storm – so much so that a new breed of technology-focused financial start-ups – fintech for short – has emerged to change the way local consumers manage their money.
In doing so, they are slashing, or in many cases eliminating, wasteful bank fees and charges.
Currency transfer fees will be a thing of the past thanks to the arrival of peer-to-peer (P2P) currency transfer services such as TransferWise and CurrencyFair.
These fintechs match people looking to swap currencies and their fees are 70%-90% lower than bank fees.
Investment fees are a drain on our savings and cost us $23 billion a year.
Australia’s first automated investment service, Stockspot, is taking on the world of high investment fees and account minimums by offering a low-cost online investment platform.
Brokerage costs will fall thanks to tech-focused brokers such as Bell Direct, which offers much better rates, and global players such as Robinhood, a commission-free brokerage app, entering the market.
Robinhood launched in the US in March 2015 and already has hundreds of thousands of users. CommSec will struggle to keep charging 0.4% per international share trade when Robinhood offers the service free.
Personal lending rates from peer-to-peer lending businesses such as RateSetter are challenging the bank model by creating a marketplace for loans.
People with savings can set the rate they’re prepared to lend at and private borrowers get a fair market price for their funds.
Credit card surcharges are often passed onto consumers at the checkout but Tyro, the only competitor to banks in card transaction processing here, will break down the stranglehold banks and payment companies have over merchant payments.