How Technology Can Amplify Your Investment
Written by Gavriel Merkado, REalyse
In innumerable ways, technology has shifted the power paradigm from the elite to the many and has empowered investors to make better investment decisions. Big data and smart algorithms mean more information, quicker, which ultimately leads to less risk for investors.
Illiquid vs liquid assets
The enabling power of technology is particularly true for liquid assets such as stocks and bonds. Advancements in financial markets technology and data systems have led to transactions become safer, cheaper and faster. Technology has provided a more systematic approach to investment compared to previous methods based more on human instinct and intuition.
Utilising technology to make better investment decisions around illiquid assets is more complex. It’s harder to track the value of illiquid assets like collectibles, art and property due to a lack of transparency around pricings. While these assets have previously had to substitute speed for clarity, there’s now a growing trend of using technology to combine the two to help produce better returns.
Prop tech is one area that is enabling better investment decisions. At REalyse we empower property developers to efficiently make informed decisions about where, when and what to invest in. Using big data analysis REalyse tackles the unpredictable element of the market, allowing users to anticipate potential risks, while also cutting the time spent on weeks of personal market research.
Peer-to-Peer (P2P) platforms such as LendInvest have established a marketplace for investors to find and invest in new and existing property loans. By removing the need for a mortgage, these platforms help investors remain in control of how much they invest in conjunction with other investors. Similarly, companies, such as Yielders, have created opportunities for people to invest in property with shares as little as £100, permitting amateur investors to become equity owners.
Another example of tech enabling better illiquid investments is Arthena. This platform enables investors to make better decisions around the value of a piece of art. By taking into account the artist’s career, the year the piece was created and an analysis of art auction results, it helps to predict the risk and return on investment.
In the financial world, the rise of robo-advisors has given investors the opportunity to consult detailed data and information before making decisions at the touch of a button. Industry leaders, such as Nutmeg and UBS SmartWealth have provided their customers with around the clock access to their investments, giving them full clarity and transparency without having to consult a wealth advisor during working hours.
Blockchain has made dramatic steps in transforming the investment industry. Forbes reported last year that it could be Wall Street’s most game changing technology advance since the internet. In a highly regulated industry such as investment, Blockchain provides a transparent way to digitally track the ownership of assets before, during and after transactions, and it has the potential to transform everything from how stock exchanges operate to how proxies are voted.
Allocator is another tool transforming the investment management industry by streamlining the process to access the information investors need, in real time and in a format that’s useful. Fund managers control who they share information with and what exactly each investor can access.
Hedge funds are also now incorporating artificial intelligence to give investors quick, accurate and transparent data. An AI fund, such as Emma AI, is designed to operate autonomously in context of wealth management, financial analysis and research.
More than ever before, technology is empowering the investor to take control of their assets. From property to finance across liquid and illiquid assets it is transforming investment decisions. As we enter the dawn of AI and machine learning, the technology will only get smarter, more intuitive and more effective. Being a technology innovator in the investment sector is a very exciting place to be right now.