What to Look for when Choosing your Financial Institution

The options for where you keep your money, or borrow it, are expanding rapidly - so what should you be looking for?

The world has changed. No, but REALLY changed. Disruption abounds across all sectors and industries, providing everyone with unexpected new ways to interact with each other and society. Unexpected new ways to meet partners. Unexpected new ways to buy a soy latte.

Just as creative solutions to travelling have brought about a new level of speed, efficiency and international beers to try, so changes to financial services have revolutionised the way we save, spend and borrow money. Gone are the days where lazily staying with one institution formed the basis for your choice.

Money management is changing

Today we find ourselves in a world where financial institutions are chosen based on flexible and innovative choices, rather than geography or habit.

The financial institution you choose should embrace change and the way the world works today. It should obviously have low fixed interest rates available on loans and flexible payment options, but also provide innovative pay-as-you-go solutions and offer solid advice via its online platforms. It should have access to your transactions and to great advice on your financial options, via whichever platform you’re most comfortable with.

It should ultimately provide new ways to manage your money that work with your lifestyle. And it should treat you really, really well. Welcome to the brave new world of finance!

Forget the ghosts of personal finance’s past

Personal loans that provide little flexibility and lengthy conditions are a thing of the past. Today people want personal finance that helps manage money better, with clearly understandable terms explained upfront. The days of terms and conditions that required a degree in astrophysics to decipher them have gone. Phew!

Your financial institution should give you the clarity and flexibility to make money management simple and reliable. It should actually make it fun to deal with personal finances. It should have personal loans, car loans and a broad range of other products that are created with you in mind. All with simply explained terms and instructions.

You have the power these days, rather than the financial institution. Moving isn’t that hard, so don’t put up with anything less than great service and products.

Would you like one or two financial institutions?

These days single-source financial management only ties us down to traditional thinking. With the emergence of newer lenders, we now have more choices in where to borrow our money.

Traditional lenders are heavily regulated and rightly so given the size of their holdings and shareholder obligations. Other less traditional financial institutions are still governed by the same rules as the old-school lenders but see these as only the starting point. They embrace the needs of customers with more transparency, flexibility and sound money management options.

Today’s consumers don’t necessarily need one solution from one provider, they understand that financial services can be split between large and small debts, long and short-term goals, and fast and slow spending.

Your financial institution – or institutions – should have products tailored to the way you live and should enable you to access the increasing number of exciting choices available. If one doesn’t provide all your needs, then look for more.

Don’t be financially confused

With a plethora of these choices available in the market you can expect to be confused by the range of lending and borrowing and investment products. Don’t let it overwhelm you. Managing money should be straight forward, and your financial institution should help you to see that. Make a list of what you expect from your financial products and services, and see which institutions fit the bill.

And in basic terms, think about the customer experience. Do you like the way your institution talks to you? Do you like its values? Don’t be afraid to be picky. It’s your money, after all.

Many consumers are voting with their feet and moving away from traditional lenders, mainly because they want to feel like more than a number.

Unlike traditional lenders, new lenders derive their revenue through a supply of products. They aren’t lending the funds deposited by other customers. This allows them to focus on small to medium lending to the market, where they have the flexibility to create niche products. Products that suit you, rather than them.

In the past it has been the norm to borrow from the institution where you deposit your hard-earned cash. That doesn’t have to be the case these days.

All financial institutions are required to adhere to responsible lending requirements but those who focus on lending rather than also managing deposited funds, have reduced the need for huge operational support. Less costs in other words.

Innovative financial institutions have taken on this change in the market and listened to consumers, providing clear, simple loan products that promote clever financial management.

Consumers are taking advantage of the rise in non-traditional lending products. And they're doing it with financial institutions that they trust.

While change is not always comfortable, disruption of the financial sector is good for everyone. Well, at least for the customers, anyway!