The Finance Industry and the Internet

Finance is one of the backbones in our industries when it comes to the field of economics
because it tackles activities associated with money like banking, investments, and debt. The term
finance is vast but putting it simply, it represents matters regarding the study, creation, and
management of money/wealth. The finance industry has seen explosive growth because of the
internet. The internet was officially introduced to the masses in the 1990s through the World
Wide Web. Since then, the usage of the internet has been regarded as a must-have in various
industries since the early 2000s. The internet is possibly the best technological advancement
invented in the IT era and one of its significant benefactors was the finance industry.

The internet has paved the way for the finance sector to reach its current state. The
finance industry currently has now more to offer such as (1) online banking & transaction, (2) e-
commerce, and (3) investing / trading. From the inconvenience of using telephones in the 1980s
to pay bills to have the convenience of paying bills, debts, and transferring funds with just the
click, tap, or scan of our mobile phones and gadgets thanks to the internet. Online banking &
transaction has become popular because of the convenience it offers to its clients such as reduce
costs and hassle from transportation, lower fees, better interest rates, paperless statements, and
the ability to manage accounts online. According to a survey done by Fiserv in 2010, a financial
service technology company, they found that online and mobile banking were growing at a faster
pace than the internet. That is why banks like BPI, BDO, Union Bank, and Landbank just to
name a few have apps or websites for online banking and transaction with multiple features.
People can now also apply for loans and insurance online through apps such as tala and cash
wagon. Transaction online through credit and debit cards is now made easy through the use of
the internet which brings us to e-commerce. E-commerce is now very popular and is a big help to
businesses in the finance industry because of its features where people can buy almost anything
they want online which reduces the hassle of physically going to malls and stores. Amazon, E-
bay, Alibaba, Lazada, and Shopee are all part of the e-commerce industry and even though it has
seen massive growth and need these past few years, the effects of this pandemic have accelerated
its growth more than before and it has now essentially become a part of our life. All of these
bring us to trading / investing online, the e-commerce industry has seen massive growth due to
the excessive demand especially during these pandemic reaching all-time highs in its growth in
the stock market. Online investing has never been these easy because investing can now be done
through websites and apps, gone are the days where investing is only for the rich because only
they have access to brokerages. Anyone can now be an investor and invest in stocks,
commodities, forex, ETFs and CFDs through online brokerages because of its easy accessibility
to the masses. These are some of the currently featured effects of the internet through the finance
industry.

In my own opinion, to maximize the effects of the internet in the financial industry and
let the industry reach its maximum potential, people can (1) improve financial literacy &
information, (2) normalizing cashless payments (3) cryptocurrency and (4) assets and customer
monitoring.

First, by the use of the internet, we can slowly improve the financial literacy &
information of the people through advocates and advertisements because there are various social
media platforms to promote these such as Facebook, Twitter, Instagram, and YouTube where the
majority of the people is focused nowadays, especially Filipinos where according to Statista
(2020), the forecasted Filipino users of social media will be up to 82.33 million by the year 2021.
People can now also search for finance in their browsers and learn accordingly. According to a
study done by Standard & Poor’s Ratings Services Global FinLit Survey in 2015, “they found
out that 1-in-3 adults show an understanding of basic financial concepts, although financial
literacy is higher among the wealthy, well educated, and those who use financial services.”
Philippines ranks at 115 with a 25% literacy rate out of the 144 countries surveyed (S&P Global
Finlist). Currently, there are a total of 1,089,443 stock market accounts in the Philippines (PSE,
2018), only 1% out of the 25% financially literate of our whole population are investing and
trying to beat the inflation. When compared to other countries around the world or in Asia, the
Philippines is at the lower end of the spectrum. Maximizing the usage of the internet to promote
smarter finance and wealth management will tremendously help the improvement of our
country’s economy and financial industry.

Second, are normalizing cashless transactions not just by the means of using credit and
debit cards but by using mobile wallets especially in the Philippines. According to a survey in
2018, 92% of people in China’s largest cities use Wechat Pay or Alipay as their main means of
payment (daxueconsulting, 2020). Paying with mobile phone wallets has become a daily gesture
not just in China but in the whole world. Just like in investing, the Philippines is also at the lower
end of the spectrum in Asia when it comes to utilizing these technology, although we also have
various mobile wallet apps like gcash and paymaya. Even though mobile payment is widely
accepted in large malls, only a handful of people use it whenever they pay for something and
people still do prefer to use credit and debit cards, it is also a challenge to implement because
most retail stores, restaurants, and small malls still do not accept mobile payments. On the other
hand, mobile payment plays a huge part in online businesses/e-commerce and most people opt to
use it. Even today as the pandemic goes on, most people are opting to use gcash and paymaya to
accept payments and donations instead of bank transfers. As I see it, cashless transactions will be
the future of our economy especially after the pandemic ends as more people will hopefully find
the value and convenience of using it.

The third is investing or the usage of cryptocurrency. I believe that somewhere in the
future, cryptocurrency will be widely used in payments as a part of cashless transactions because
money will depreciate due to inflation and for other various reasons. Cryptocurrencies are a set
of digital/virtual currency that is secured by cryptography and originated on blockchain
technology. Nevertheless, the value of a cryptocurrency is driven by demand so it somehow
depreciates if the demand is not meet.
 Fourth and last point would be asset and customer monitoring. Monitoring hard, soft, and
business assets that are stored in a cloud-based server for an easy review and assessment anytime
and anywhere. The internet could also be for monitoring customer activities (Cookies), customer
insights, and reviews for a better customer service.

In conclusion, the best technological advancement invented in the IT era that I would
utilize would be the internet for the finance industry since the internet has many uses and ways
for it to reach its maximum potential. The current effects of the internet in the industry have been
convincing. I believe that what I stated on my statements will have an impact on the finance
industry in the future and hopefully help in maximizing the results and potential of the industry.