For decades, investment has been considered an exclusive right of rich and elite people. The intricacies of investing, high entry costs, and limited sources have restricted masses from trying their luck into the trading world. However, the finance industry is witnessing a new turn with the emergence of Financial Technology or Fintech.
Apps and websites like voltixedge.org are changing the face of the finance industry by providing easy investment options at a lower entry costs. Fintech has availed investment options to common people, which were earlier exclusive to wealthy people only. Read more to know Fintech has made investment knowledge easily accessible.
Role of Fintech in Democratizing Investment
Fintech has played an integral role in democratizing investment. Online investment apps and websites have made trading affordable by removing traditional trading barriers. These Fintech platforms have provided a more inclusive and easy-to-understand trading atmosphere so that beginners can easily understand the intricacies of investing.
Here are some of the ways through which Fintech is making the world of investment more democratized!
Eliminating Entry Barriers
The primary reasons that stop people from investing are the huge entry cost and complex process. Contemporary Fintech platforms have fixed this huge investment obstacle by introducing user-friendly systems that help people kick-start their trading journey. Furthermore, they allow investors to take baby steps by providing them with small trading options that don’t need huge sums of money.
Using Blockchain to Decentralize
Blockchain is the main technology behind cryptocurrency. It offers a more secure, decentralized, and transparent framework for making transactions and storing investment-related data. Fintech has used blockchain technology to turn the entire trading process upside down.
Now, investors don’t need any intermediaries for trading as they can easily execute investment-related tasks like – order placement, matching, and settlement in a peer-to-peer manner. It reduces cost, increases transaction speed, and eliminates the chances of misinformation.
Automated Investing
Investment apps and websites have robo-advisors that use algorithms and AI to help people manage their investment portfolios. They provide customized investment advice and automated portfolio management facilities at a cheaper price than financial advisors. Automated investing has undoubtedly made professional investment management more affordable and accessible.
Mitigating Geographic Barriers
Investors from all across the globe can invest from the comfort of their homes in the global market, regardless of their geographical location. Thanks to blockchain technology, investors now get an array of options and financial instruments while investing, that too without any restrictions of local rules.
Expanding Governance and Investor Rights
Fintech enables users to be direct decision-makers with direct shareholder participation. It’s a blockchain-based voting system that allows users to cast their votes safely on several corporate issues. This direct involvement in the decision-making process helps strengthen investor rights and improve transparency.
Fractional Investing
Online investment apps and websites introduced people to fractional investment, where they can hold a fraction of a share or asset rather than purchasing the whole unit. Fractional investing enables users to invest in high-value assets, with less money. Additionally, this type of investment helps users diversify and improve their portfolios in the long run.
Social Trading
The best part about using Fintech is that it allows users to communicate with other users and exchange investment ideas with them. Exchanging ideas with each other not only provides more learning opportunities but also enables them to copy the investing techniques of successful traders.
Investing has become much easier since the advent of online investment websites and apps. Fintech technology has helped people accomplish higher returns by educating them about the intricacies and risks involved in trading. Moving on, let’s take a quick look at how Fintech has potentially influenced private market investments in the subsequent section.
How Fintech Has Influenced the Private Market Investments?
Apart from the public investment market, Fintech platforms have highly influenced the private market. Private companies are using finance apps and websites for private market investments so that they can attract more retail investors. They seek assistance from these Fintech apps to expand their reach into the private market.
Furthermore, these online investment websites and apps provide diverse investment options and help them access unique asset classes. Companies are using Fintech to get higher returns and diversification in the private investment market.
Fintech has undoubtedly brought good fortune for retail investors. People who want to dig deep into the private investment market can rely on online apps and websites to diversify their portfolios. Approaching the end, let’s see what the future holds for the Finance Technology platforms.
Future of Fintech Apps and Websites in Constantly Evolving Investment World
Fintech platforms hold a promising future as they appear to be continually growing and adopting new horizons with the integration of Decentralized Finance (DeFi). Modern DeFi technology is widely accepted and appreciated because of its potential to open up several new opportunities for retail investors.
Even the ongoing growth of the Fintech industry is remarkable. The finance technology thrives to become more efficient and effective in risk management with lower costs for financial services, in the near future.
Also Read: The Ultimate Guide to Financial Literacy
