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How technology is transforming finance and investment

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By Prakash Nagarajan, CEO & Founder, Investmates

While the country’s economic liberalization and improved purchasing power parity enabled more people to realize the importance of investing, technology made investing accessible to everyone. Today, investing is undeniably the most effective way to maximize wealth and more than a desire; it is a necessity. But unlike the older times, when the options were few and the process of investing was tedious, digital imperatives have opened new possibilities.

If we look at the practice of investing in stocks, we will observe how technology has transformed the domain. Besides infusing discipline and structure to the entire process of investing in stocks, technology has created more visibility and transparency, thus minimizing the risks for the investors that were too high earlier. Imagine a person investing in stocks 30 years back. His decision used to be based on speculations, with limited access to actual market or performance insights to support the decision. But the introduction of digital Demat Account has not only made buying and selling stock easy. Instead, it has unlocked new ways to access deep market insights. A secured login can access a digital dashboard like a bird’s eye view of past, present and future investments. Today, emerging tech like AI and ML is changing the game with more intensity by offering personalized recommendations based on the performance history of stocks and one’s preferences.

The digitisation of banks and the large-scale adoption of e-banking also impacted the investment landscape greatly. If we observe closely, we will notice that an investor’s average age has decreased considerably. Technology has enabled the savvy younger generation to take matters into their own hands and make important investment decisions which their parents, mainly the fathers, used to make. Now a wide range of options is just a click away, and one can even track how their money grows over time. Besides, technology has consolidated the entire investment ecosystem where a banking app is not just for banking but covers other areas of one’s financial goal. It is a marketplace where one can do the daily transaction and at the same time can utilize funds to buy a mutual fund or health insurance in just a blink of an eye.

With IoT and the emergence of cloud-based digital technologies, many aggregators and Fintech companies have brought innovation into the space, thus bringing a paradigm shift in the investment landscape. A first-time investor doesn’t have to worry about finding the right advisor as one can access a marketplace that not only offers multiple options but also gives the flexibility to compare investment products based on long-term and short-term financial goals.

With technology becoming more intuitive, many fintech companies are now building products that give near-accurate predictions of the performance of a particular investment. Based on preferences, income, buying habits and other factors, now an app-based investment platform can provide recommendations that one can rely on to realize a specific financial objective.  While it is true that market-linked investments always come with some risk, technology is heading towards a future where it can effectively mitigate risks and help with data-driven decisions to invest in the right instrument.

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