Reference no: EM133174447

Using one of the many financial apps (most of them are free) that are available for your tablet or smartphone these days, you can become your own banker. In fact, trips to the bank or even to an ATM could soon become a thing of the past. The new apps let you do the functions that you could do on a bank's Web site and more. For example, to deposit a check into your banking account, you can simply take a photograph of the front and back of the check, after which the app will ask you for the amount you want to deposit. Then you type the account number and then press "OK" to complete the deposit. With the Mint app (mint.com) from Intuit, you can even perform all sorts of analytics on your account. For example, you can establish a budget and keep track of the expenses in various categories, such as food, gas, and groceries.

Another app that offers similar services is HelloWallet (hellowallet.com). Still other apps help you track and report work-related travel expenses. An example is an iPhone app called QuickShot. It allows you to take photos of your receipts, and the photos are automatically stored in an account on Dropbox, an Internet file-storage service. 48 Banks, brokerage firms, and other financial institutions have developed their own apps that simplify their customers' financial interactions with the institution. In addition, computers and robots are increasingly playing a role in the areas of finance and banking; for example, high-frequency trading in which bots account for up to 80 percent of the daily volume on the stock market and can buy and sell stocks in microseconds. Another growing application is the rise of the "robo advisor." This is a method to automate the asset allocation of investments using a computer algorithm. When it comes to investing a typical investor has three choices: do-it-yourself, a robo advisor, or a financial advisor. Which option to choose depends on several factors such as the cost of the investment, age of the investor, amount of investment, his or her risk tolerance, and knowledge of investing. According to research, using "robo advisor" is certainly a viable choice. The three largest robo advisors by assets under management are Vanguard, Schwab Intelligent Portfolios, and Betterment.

Some are fully automated, and some are run in human-assisted mode.

Answer the following questions:

1. What technology is used when you deposit a check into your account using your smartphone and your banking app?

2. What are some examples of analytics that can be done using financial apps?

3. How are these new financial apps changing the banking industry? Are the new tools primarily coming from new entrants or longstanding companies?

4. What is a robo advisor? Which factors should an investor consider before selecting an investing option?