How is Fintech Shaping The Future of Investing?

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How is Fintech Shaping The Future of Investing?
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How is Fintech shaping the future of investing?

Gone are the days when people had to queue for hours to get a bank statement or withdraw cash. Financial technology – otherwise known as fintech – has revolutionised the financial landscape with 46% of people now using digital channels exclusively for their financial needs. Traditional banking services have been replaced by a plethora of tech-advanced services including blockchain which is making financial transactions safer and locking down on fraud. But how is fintech as an ever-evolving economy, shaping the future of investing? Let’s take a closer look.

Algorithmic trading

Executing investment decisions is not an easy process. From putting together an investment portfolio to navigating market changes and volatility, there’s plenty to think about. But fintech is making the investment sector much more accessible thanks to automated trading developments.

Algorithmic trading, for instance, is the computerised buying and selling of financial instruments at a very high speed – in accordance with pre-specified rules and guidelines. The great thing about algorithmic trading is that it analyses insightful data and makes relevant decisions much faster than any human, allowing investors to capitalise on split-second, computer-assisted, decision making. Algorithms also continuously and automatically update, tweaking strategies according to changing prices, volumes and market volatility, thereby reducing investment mistakes caused by human error.

AI and Big Data analysis

Algorithmic trading is a considerable fintech development incorporated into platforms such as Meta Trader 4 and 5. The advantages are clear to see, but there’s another digital development that takes algorithmic trading to another level and that’s the introduction of AI. Through machine learning – a branch of AI – algorithms can analyse Big Data and make investment decisions based on patterns that are difficult for humans to detect. As well as masses of traditional data such as security prices, corporate financial statements and economic indicators, non-traditional data sources can also be studied by AI enhanced algorithms including social media and sensor networks.

All Big Data analysed is used to shape the investment decision-making process and generate alpha, while simultaneously reducing losses.

Conversational technology

Fintech is not only making processes more efficient. It’s also increasing consumer expectations. These days, investors know that can get what they want, when they need it, without having to talk to a human advisor. This is all thanks to robo-advisors – which are capable of everything from automated customer onboarding to creating customised portfolios.
Chatbots also play a huge role in today’s financial services industry, powering personalised communication at scale and offering 24/7 service. Essentially, a chatbot is able to extract and analyse the intent of users, delivering personalised information in real-time. For instance, chatbots can provide up-to-date information about specific trades that might affect the overall decision-making process of the investor. Through AI technology, chatbots can also monitor where consumers hang out online and direct messages to the correct channels – otherwise known as ‘push’ notifications. The consumer can also ‘pull’ information from chatbots as needed.

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Investment apps

The fintech umbrella for investment also includes finance applications which make it easier than ever to place trades, monitor portfolios and make trading decisions. Many apps allow you to trade multiple assets, from stocks and EFTs to cryptocurrencies offering easy access to charts, graphs and other clearly presented vital statistics. Many apps even marry social media with stock picking allowing you to play games as you navigate the markets.

Fintech is significantly reshaping the future of investing with everything from fintech algorithms to chatbots and fintech apps making financial services easier to access.

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