Digital finances have increased exponentially over the past several years, from online banking to various financial apps. Learning about these new financial tools may help you take more efficient control over your finances. However, there are also several digital financial risks to be aware of. Reach out to a Tullahoma bankruptcy lawyer to explore your legal options if you find yourself in financial trouble.
Digital Finance Tools
There are three main types of digital financial tools under fintech, a term used for financial companies. These three categories of digital financial tools include digital banking, blockchains, and artificial intelligence. You may have already heard of or used digital banking.
Digital banking involves any online use of banking on websites or smartphones. Most people have used digital banking regularly through direct deposit digital paychecks, paying debt online, online shopping, or digital banking services like PayPal or Cash App. Transferring money online from your checking to a savings account is another common form of digital banking.
What blockchain technology does is validate digital payments on online ledgers to allow the exchange of digital currency. Digital currency involves the use of cryptocurrency, a digital version of money, to pay for digital services or digital products. Blockchains make these transactions possible.
Artificial intelligence is incorporated now into many digital financial services to speed up and simplify the process. Not only can artificial intelligence and machine learning technology speed up financial services but they can also be used to detect fraud. This could be used to protect people from financial problems.
Risks of Digital Finance
With the many benefits digital finance has to offer, there are also risks. Being aware of common digital finance risks can help you avoid falling into potentially serious financial problems. These problems may include scams, losing money, or loss of your private information.
Any digitized data like your personal financial information runs the risk of losing privacy. Hackers and scammers can find ways to access your private financial information, leading to potential problems. However, new technologies like advanced password protection and encryptions are making security stronger.
Giving permission to third parties to be able to use bank account data online is another issue. Over time, this can lead to conflicts over who has rights to banking information, leading to less privacy for bank users. Banks may have to worry about liability issues when breaches of data occur.
Scams are becoming more common with digital financial services. People can easily pretend to be trustworthy, whether through online digital services, online shopping, or finance apps. The internet makes it much easier to scam people and commit fraud. Significant financial losses and setbacks can result from being scammed.
Contact Tom Bible Law for Legal Help
Do not panic if you find yourself stuck with major financial problems. All you have to do is call us at Tom Bible Law at (423) 424-3116 for a consultation today about your financial options. Our legal team of Tennessee bankruptcy attorneys is ready to help you find ways to escape your financial dilemma through bankruptcy. We are located throughout the Tennessee cities of Chattanooga and Tullahoma.