10 banking buzzwords you must know in 2018
Article by Ben Tosi
Financial jargon can be hard to keep track of at the best of times and just when you think you’ve gotten a handle on the latest money mutterings, a raft of legislative changes or technological disruptions mean that they change all over again.
This year, impress your family and friends by dropping some of these big banking buzzwords in your next casual finance conversation.
Biometrics, in itself, refers to the measurements of the human body - but what does that have to do with banking? Well, we’re likely to see biometric payments become commonplace in Aussie banking over the next year - if Visa and Mastercard are to be believed. This means you’ll be able to pay for bigger ticket purchases (over $100AUD) using a selfie or fingerprint instead of your PIN.
Acronyms can be particularly hard to keep track of but one definitely worth staying on top of this year is NPP. Short for New Payments Platform, this is the big technological advance that will allow Aussies to transfer money between participating banks without any real-time delay. Yes, that means paying your mate back for dinner on the spot and these instant payments are set to arrive sometime this month, so keep your eyes peeled.
Paying with cash seems archaic with the amount of wearables that are hitting the market. These are items of clothing - think wristbands, watches or even rings - that allow you to pay for your morning coffee without having to reach for your wallet - simply tap and go.
Okay, if you haven’t at least heard of this one, where have you been? Cryptocurrency is all the rage right now and refers to encrypted digital or virtual currencies, think of Bitcoin as a type of cryptocurrency (rather than a term you can use interchangeably). These types of “crypto” are splashed across the headlines at the moment because they’ve become a popular investment option.
Fintech’s cooler, younger and far more attractive brother, insurtech refers to the budding technologies that are primed to overhaul the current, outdated insurance industry in Australia and across the world. This might include things like smart home technologies that help reduce your home insurance premium or novel startups that aim to revolutionise how customers get their insurance premiums.
Another acronym worth stashing away in the memory bank, CCR unfolds into comprehensive credit reporting, a piece of legislation set to come into full effect in July this year. Dubbed a “game-changer” by Treasurer Scott Morrison, this change to credit reporting means lenders are forced to take into account your entire credit history - both good and bad - so that you can get a rate that better represents your responsibility as a borrower. Time to clean up that credit card debt, folks.
7. Robo advice
Guess what, artificial intelligence (AI) can now take care of your investing needs. Robo advice refers to algorithm-based investment advice (no, not from actual robots) formulated on your specific financial situation. These online companies, known as robo advisors, gather your information via an online form or questionnaire and then invest your money in a portfolio that suits your level of risk, offering a cheaper alternative to traditional financial advisors.
8. Chatbot bankers
Nope, not real robots either unfortunately, but Aussies are increasingly interacting with chatbot bankers through a format similar to many digital messaging services, rather than a real-life person and this is only set to continue in over the next year. These text-based alternatives are already used by NAB and UBank and allow Aussies to contact their banks simply using their smartphone or computer.
The new kids on the block, neobanks have risen to popularity abroad and are set to make a splash down under this year. These guys are a little different to the big banking players because they are entirely digital and are trying to reinvent old-school practices. In 2017, Aussies were given the chance to invest in our very own neobank when Xinja launched a crowdfunding round of investment and this particular neobank is set to offer its first product to the public at some point this year. But keep an eye out for any others that look to join the market after having considerable success abroad.
Augmented reality or ‘AR’ is a technology that lets you see the world in a completely new way - literally! Basically this tech alters your real life view of the world with computer generated images and interactions and is already being used in the banking sector. For example, in October last year, RaboDirect released an AR app for your phone aimed at addressing Aussie food waste but experts predict this could soon be used in retail experiences, offering customers loans and giving them an idea of potential repayments before they purchase a big ticket item.
Being down with the latest lingo isn’t all you need for a financially fruitful 2018, however. A ripper bank account with low or no fees and a range of nifty features is also a must.
So start your year right by making sure you’re stashing your cash in the best account possible by comparing a range of popular providers and products with Mozo’s bank account comparison tables.