How the IoT is changing our perception of money

Consumer debt is rising. In April of this year, Americans owed $1 trillion on credit cards and the average household owes $15,654 on credit cards. The 2017 Household Debt study carried out by leading personal finance website, NerdWallet, reveals that spending has overtaken income in many areas. Indebted Americans are increasingly putting medical expenses on credit cards – and paying a horrifying about of interest each year. It isn’t just credit card debt that’s a problem. Auto loans add up to $1.21 trillion and student loan debt is around $1.36 million.

Why is Debt Rising?

Income hasn’t kept up with debt. Medical costs are rising (34%) and food is now 22% more expensive compared to a 20% in income. Housing costs have also outpaced income. These three expenses all combine to create a debt bubble that threatens to implode. The good news is that technology is making it a lot easier to manage our personal finances.

IoT is Growing

The Internet of Things is an area of enormous growth. Cisco believes the IoT market could be worth $19 trillion in the next ten years. They say it could add an extra $10 trillion to the world’s GDP. Whether this comes to pass remains to be seen, but there is no doubt than IoT technology is revolutionising the way we do many things in everyday life.

IoT is having a huge impact in the financial services sector. NEOS is a UK-based insurance company. They provide their customers with technology to monitor real-time threats, so if their home floods or they are away on holiday, they can minimise the damage or prevent loss before it happens.

Even everyday objects like kettles, fridges, and baby monitors are becoming connected. Using technology to manage our lives is viewed as normal, but research indicates that only 33% of 18-24-year-olds feel their banks provides enough digital tools to help them better manage their finances.

Intelligent Banking

Interact, the world’s first intelligent bank opened its doors in 2016. It uses IoT technology to connect customers with their bank. IoT automatically detects when a customer overspends and can be programmed to give them an electric shock. It can also integrate with Nest Thermostats and turn down the heating a notch or two, saving the customer money.

Amazon’s Alexa is one example of how the IoT makes life so much easier. Ask “How to trade forex”? or “is it going to rain today?” and she will have an answer immediately. Even better, you can also use Alexa to manage your money. If you have a Capital One account, ask Alexa to check your balance, make a payment, and track your spending. Alexa works using simple voice commands and can be programmed to perform simple tasks. To enable the Capital One “skill”, download the Alexa app and select “enable” for Capital One.

The Internet of Things is fast evolving and it is becoming increasingly likely that we will soon be able to manage every aspect of our lives via IoT tech devices, from managing investment portfolios to feeding the dog. These are exciting times – are you ready?