Is fintech making it too easy to mis-buy financial products?

I had an interesting exchange with a contact of mine. He is a seasoned IT professional in the banking sector.

He said recent news of Wonga and Curo Transatlantic payday loan firms going bust made him wonder if fintech is making it too easy for people to “mis-buy” financial products.

We crave the ease of fintech, but are there risks that it is becoming too easy?

This is what he said in full: “All you have to do is click a few buttons on a mobile phone to get yourself into debt these days.

“In the old days with paper applications and visits to a bank branch, you were left in no doubt about the consequences of taking out a credit card, loan, mortgage or other product. Now the industry is making the process into a quick job on mobile apps I suspect a fair few folks simply don’t appreciate the real world consequences of they are getting themselves into.

“With financial services now presented much the same as games or gambling on mobile apps, I can see why people may not realise the gravity of what they are signing up to by clicking a few buttons on their phones.

“So I have prediction….. financial services firms will become obliged to make it a bit harder for people to get themselves into debt and that may mean changing how financial services are presented, particularly on mobile devices. Generation Z has grown up in the internet world with an ‘undo’ button but now they are emerging into the real world, the click-happy approach may lead to an increasing debt problem for the younger generation. Speed and convenience is not always a good thing when the thing you are getting into might bite you later.”

 

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