The nature of how we invest has changed an incredible amount in a very short time. Today, it seems incredible that there was once a time in the not so distant past where placing an order for stock required calling up your stockbroker and explaining exactly what you wanted them to do. Instead of going through the rigmarole of going through a human third party, the digital revolution changed the world of investment so that it is barely recognizable from the past. Much of investment is now done through handheld smartphones via online brokerage apps like the FXTM mobile app, which allows people to trade stocks and shares in the United Kingdom, Cyprus, South Africa, and Mauritius. This has democratized the world of investment, making it accessible to the many and not just the few.
If there is one thing that is for certain, it is that the inexorable pace of technological change will bring even more revolutionary advances to how we invest in the future. Here are just a few groundbreaking developments that we might see in the near future.
Blockchain is the name for the sophisticated coding which allows cryptocurrencies like Bitcoin to run. While blockchain is mainly used for cryptocurrencies at the moment, developers are only just waking up to its vast potential for use in a wide array of other arenas, one of which is investment.
The incorporation of blockchain into the stock exchange in the near future is set to revolutionize the nature of how transactions are realized. A stock exchange which runs using blockchain will majorly cut down on costs and the time it takes to complete a transaction. Lower running costs will likely have a positive knock-on effect for investors in the form of lower fees.
2. AI Wealth Managers
One of the biggest changes that is already upon us has to do with artificial intelligence. Algorithms used in technology that has come to be known as “fintech” is now sophisticated enough to compete with traditional methods of delivering financial services.
Data from recent studies show that an increasing number of investors now consider the advice given by AI financial advisors as more useful and accurate than that given by their human counterparts. These opinions have been borne out in evidence that shows that AI has helped to save investor returns in the 2020 market crash.
As AI technology moves even further into the realm of science fiction, the door has been left open to the possibility that human investment experts could realistically be supplanted by AI and super-intelligent algorithms in a few years.
3. Next-Gen Financial Instruments
Since the advent of the modern financial markets, the proliferation of new financial instruments has been simply breathtaking. New financial innovations appear every year, and this trend is only set to accelerate as we move into a new age of technology. Indeed, keeping up with the bewildering array of new tools at our disposal is something that even investment experts struggle with. There seems to be literally no end to the number of new ways that we can speculate using advances in technology.
4. Increased Personalization
One of the great things about the tech revolution is that it has allowed people who would previously have had no access to the stock market to participate. At just the click of a button, anybody with an account with an online brokerage account can now invest and make money on any asset class using any financial instrument they choose. As mobile technology improves, so will the access that people have to investment opportunities. This could theoretically have the effect of leveling the economic playing field, reducing the inequality that exists among people in different geographic regions of the globe.
The world of investment has always been at the cutting edge of technology. Where money is concerned, investors are prepared to use any advantage that they can derive from technology that they can to maximize profits and minimize risk. While it is hard to predict the future, we can be certain that technology will continue to play a massive role in how markets run and how we make the decisions that inform our investment choices. We can only hope that these advances will help to bring the potential of investing closer to more people.