What impact will Fintech have on future investments?
Fintech is a term used for “finance” and “technology”, it is also used to refer to any company that uses technology to automate or improve financial services. This is a fast-growing industry, serving both consumers and businesses in a variety of ways.
This industry is developing rapidly and is expected to continue to expand for many years to come. In fact, experts predict that the industry will exceed $ 300 billion globally by the end of 2022. Fintech can now be used to describe a variety of financial activities, including money transfers, online banking and investment management.
Previously, anyone wishing to invest in stocks, shares or bonds had to seek out a broker. This involved paying brokerage fees, commissions and other fees. For those with a small investment fund, this was extremely unaffordable. After all, if your total fees will add up to $ 20 or $ 30 and you only have $ 50 to invest, it is far better to put that money into other types of investments that do not carry the same fees.
However, the development of Fintech has made it easier to initiate and manage investments. So how will fintech shape the future of investment in the coming years?
The current technology
Even casual investors have probably interacted with robo-advisors. For many people, this is their first interaction with investment fintech, which provides access to investment advice and management without having to talk to a physical broker.
The current robo-advisors allow investors to start trading, study investment reports and manage a portfolio. There are preset portfolio options and the ability to create a bespoke portfolio, with little or no investment experience.
However, this has only scratched the surface of fintech development, and there are many trends that are likely to build on this technology in the near future.
This revolutionized the investment industry and forced many established players to change practices and fee structures. Many debt counselors have a very low fee structure and brokerages and investment firms must follow suit to remain competitive.
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Fintech trends to look for
With such expected growth, there are a number of fintech trends that are expected to emerge or grow in the near future. These include:
Blockchain
Blockchain technology is relatively new, but it is gaining ground in the financial industry. In fact, financial institutions including banks have played a major role in the blockchain exploration, especially with regard to SME loans and risk management.
Blockchain solutions can be utilized to reduce costs and reduce risk. While blockchain cannot eliminate corruption, it can help verify identity and allow the execution of secure digital transactions. This means that we can expect to see more cryptocurrencies emerge in the years to come, creating new opportunities for investors.
AI and ML
Although robotic consultants have been around for almost ten years, this technology continues to evolve. In fact, one of the fintech trends is to look for artificial intelligence (AI) and machine learning (MI).
These technologies are an important contributor to the growth of the fintech industry. There is a great potential for AI and ML that can be used to solve customer questions and perform other virtual assistant tasks.
For example, when you have an investment question, you may be talking to an AI-powered chatbot that can not only handle transactions, but also offer great investment advice. ML has made AI chatbots even smarter, with the technology ensuring that robots can execute complex commands faster and more efficiently. ML also creates a framework for examining credit data and other factors that can influence investment decisions.
Voice technology
Many of us are familiar with using voice commands around our homes with smart devices and other integrated technology. However, fintech is also expected to increase the convenience of investing in voice technology.
Fintech developers and creators are aware that Gen Z is on the edge of technology trends and appealing products tend to quickly become a success. So they can make investment solutions more attractive with the integration of voice technology.
AI-powered voice assistants will offer simplicity and convenience for handling finance-related tasks, allowing secure payments and investment initiation without having to access a keyboard.
In fact, speech interaction is already in use for many daily banking tasks. Voice technology has the potential to improve financial services. The extra security can allow you to make online payments in seconds, instead of having to wait days. Leading financial institutions such as Bank of America, Citibank and JP Morgan Chase already offer instant bank transfers thanks to this technology.
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How Fintechs will affect investment companies
Fintechs is also expected to have an impact on investment companies. Investment firms will need to evolve to keep pace with new technological developments, which may include:
Cyber security
Security is at the forefront of all financial decisions, products and services. Investors need to feel confident that their money and data are secure before considering a transaction at all. Although there has been a lot of progress in a number of new technologies, the cybersecurity field has been relatively untouched. This creates an enormous potential for growth in the cybersecurity niche.
Investment firms and companies need to develop standards for data protection that not only protect their own assets and data, but also assure investors that their funds and personal information are secure. This can be achieved by developing fintech network security products and services.
Adoption of biometric security systems
This follows from the previous point, but with increasing security concerns, investment companies will have to take further steps towards their security measures in the form of biometric security systems.
Biometric security is an emerging solution that is guaranteed to shape the future of investment and financial products in general. This technology is already available, but developments are likely to reduce the need for physical contact. Contactless biometric solutions allow you to keep your investment information secure without having to touch any device.
These systems must, of course, be integrated into investment platforms, which may require some additional R&D from the investment companies.
New regulations
In light of growing concerns about data security, it is likely that investment firms will have to comply with new rules. There are several bodies responsible for regulation in the financial industry; FDIC (Federal Deposit Insurance Corporation), FRB (Federal Reserve Board) and SEC (Securities and Exchange Commission) .Each of these agencies has specific responsibilities and functions independently, so investment companies must continue to comply with new regulations as they are adopted.
From risk management, identification verification tools, anti-fraud and account verification, it is expected that new fintech products and services will have to be regulated to ensure customers a very secure investment platform.
Summary
Technology seems to be evolving at a rapid pace, and fintech can evolve even faster. This is guaranteed to have massive implications for both investors and investment firms in the coming years. Due to the rapid development, fintech products such as contactless biometric security systems, voice technology, artificial intelligence and machine learning will shape the future of investment.
These technologies will be developed to increase the user-friendliness of consumers, make investments more accessible and improve security. This should make it much easier for beginners to start trading and develop a balanced portfolio.
The new technologies will also require investment companies to make changes in procedures and processes to meet the growing demands of the industry. However, these companies should be able to leverage new fintech systems and devices to make the transition easier.
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