The technologies are creating a lot of opportunities for us in terms of utilizing our finances. The tendency has been that new forms of investment are becoming more popular, current investments are becoming more accessible and efficiency is improving, all of which contributes to more consumer participation.
It is no surprise that the financial market is the most advanced in terms of technologies and the efficiency that those advancements have brought to those who are involved in the market activities is irreplaceable. It is also true that the financial market was always occupied by professional investors who had special knowledge and experience in the finance sector and they used it as an additional source of income. However, the industry is already opened up for average investor or for those who do not have special knowledge in this field, which became possible due to the many different branches that were created inside the financial market itself, for example, crypto, where anyone who wished to invest in the cryptocurrencies can open an account within the seconds.
There are many different ways in which technologies have influenced investment opportunities and the article will review some of the most important ones.
The introduction of internet brokerage platforms significantly altered the game of stock and bond investment. While this is bad news for stockbrokers in the financial services business, it has made an otherwise difficult and perplexing manner of investing accessible. Modern platforms allow ordinary individuals to trade with one single click and some even provide low or even no-cost transactions, as a very well-known Robinhood tactic, known as the “free trade” concept.
In some cases, potential investors do not even have to connect with the brokerage companies, as it happens in the case of opening a forex trade account, everything can be done manually, starting from creating an e-wallet and ending up with making transactions. It looks more like executing the transfer from one bank account to another, everything with the help of special software and technological developments.
Real estate investing has also become more accessible thanks to the advances in technology. Previously, real estate investors were confined to investing in their immediate area, but owing to virtual tours and other forms of immersive technology, it is now feasible to examine and view properties from afar.
The investor can simply discover a property management service provider who can assist the investor to manage the property remotely thanks to the abundance of internet solutions accessible. Some of you might think that the internet created this opportunity way before, when it became possible to upload pictures of the estate, however, it is not giving the same experience to the investor as the virtual broadcast.
Based on the amount of attention that one may get from the international audience, online interactions are also opening the door to new options. Crowdfunding platforms are accessible to entrepreneurs and innovators hoping to raise the finances needed to make their business or invention a reality.
There has been a drive for new crowd-based fundraising and investing platforms in the aftermath of crowdfunding. The concept of contributing funds to crowdsourced loans, known as P2P lending, is becoming more and more popular. And while being tightly controlled, equity crowdfunding now has more options than ever.
We must also take into account the huge array of technological resources available to the common investor. Smart investments do not mean that it is only good or bad, the most important aspect is to balance the strength of each investment they make and understand the results of the potential decisions.
People can now read and comprehend thorough evaluations of stocks, bonds, ETFs, as well as publish their own studies, thanks to several authorities. The rise of social media and other platforms of course has democratized the debate.
Transaction speeds and fees
New technology is also making stock, bond, currency, and other financial transactions considerably faster and cheaper for the common person. The average transaction charge has dropped dramatically in recent years, and it will continue to fall as brokerage platforms become more competitive. Consumers benefit from a new system that is capable of damaging far bigger volumes with a fraction of the resources.
There are several important reasons why accessibility should be taken into account.
Wealth and retirement – people may create money and strive toward a financially secure retirement by investing intelligently and regularly. This might reduce the strain on social security and Medicare, as well as guarantee that more individuals have access to the resources they require to live comfortably.
Profitability – financial institutions stand to make more when more individuals use their platforms, even if costs are reducing. More money is in circulation, which stimulates economic growth and those who invest in these financial organizations stand to benefit equally.
Opportunities – for the typical customer there are also more options. Crowdfunding is an option for entrepreneurs and innovators. Crowd-sourced loans might be a lifeline for individuals in financial need.
The possible scenarios
The technologies are most likely to increase financial engagement even more. For starters, we should expect the development to follow a pattern similar to what we have observed in the past. Transaction speeds will improve, transaction fees will fall, and new platforms will arise on a regular basis to provide customers with fresh investing options. Trading platforms and blockchain-based currencies are just two examples of how decentralization and crowd-sourced technology might alter the financial sector.
It is more likely that we will see increased integration and outreach as well, making investment available to those who may not otherwise participate. Investment platforms that are connected with popular social media platforms, or even traditional bank accounts, for example, might expose the concept of investing to a broader audience. In any event, the world of investment will almost certainly continue to evolve in the near future. Even our present knowledge and approach to investing may become unrecognizable in a decade or two.