If there’s one thing you can be sure of in the investment industry, it’s change. Nobody can survive in investment by standing still; there’s constant pressure to attain a competitive advantage. The past few years have seen a great deal of change as companies have sought to recover from the impact of the 2008 financial crash, and one of the big drivers in making this happen has been the advent of new technology. How can we expect this to develop over the next few years, and how is it reshaping the industry?
Companies and customers
One of the key areas in which technology is making a difference is in bringing investment companies closer their customers. This is about making the world of finance more accessible, and it’s about making it more appealing. Some companies are looking at the developing phenomenon of gamification to see if there are ways that they can make applications used by customers more fun. They’re aiming to get away from the old image of finance as a club for a handful of professionals, showing that it’s something anybody can engage with. This is also why you’ll be seeing more and more great resources out there to help the small investor. Take a look at these interesting iqoption reviews, for example, and you’ll see that it’s getting much easier for newcomers to find support as they research different investment opportunities.
Investment management and data scientists
Despite the competitive pressure, investment has been slower than some other industries when it comes to bringing in high-level data scientists. Now that’s changing fast. Investment companies are increasingly aiming to recruit and develop in-house talent rather than relying on the support of agencies – technology is now too integral their systems for the latter to remain an option. There is still, however, some distance to go in getting up to speed on data architecture and data management, and those companies that progress most quickly in this area can expect the biggest rewards.
Big data
Big data has been a buzz phrase for some years now, but it’s only in the last few months that it has really begun to reach its potential in the real world. Up until this, people were collecting a lot of data but they weren’t really putting it to use. The reason? There just weren’t the software tools available. Existing analytical tools could only cope with so much at once, so getting through sizeable quantities of data was a slow process and it was difficult to make comparisons on the scale that the raw data promised. Doing so now is making it easier for companies to identify trends in customer behaviour and, at the other end of the scale, trends in the markets, potentially providing big financial advantages. The software is continually improving so it’s probable that computers will be taking on much more of the burden of predictive analysis in this way over the coming years.
Biometrics in banking
Of course, the larger the amount of personal data that companies are dealing with, the bigger the data security issues they face. One of the ways that the investment sector is dealing with this is by implementing biometric safeguards. The existence of fingerprint recognition technologies in an increasing number of mobile devices provides one useful method, and there’s currently a lot of work going into the development of iris scanners, so don’t be surprised if, in a couple of years, you find yourself gazing meaningfully into your phone in order to gain access to your trading accounts.
Managing the risks
No technology is perfect, and concerns have been expressed to the effect that over-reliance on technology might precipitate another financial crash. Is this really something you need to worry about? Yes and no. The important thing is to maintain skill levels (so that essential work can be done in the absence of software if necessary). It’s also helpful if different businesses are using different pieces of software to do equivalent jobs. The risk of cyber attacks by extortionists, terrorists or hostile nations is a real one, but its impact can be limited provided there is diversity in the tools businesses are using and provided people retain a real understanding of the work being done.
Technology may have its vulnerabilities, but it’s enabling remarkable progress in how the market works. At this stage, nobody who’s serious about succeeding as an investor can afford to eschew it.