Technology has been a major force for good in many areas of modern life over the last decade or two. From the impact it has had on day to day basics like transport and shopping to the way it has changed the worlds of politics, commerce and more; its influence is everywhere. But what about the impact of technology on finance? How has the financial industry been changed for the better since the arrival of the web – and how likely are these developments to stick around for the long term?
There are many different ways in which tech has reshaped the finance sector. The profession of “trader” has now changed its boundaries to a certain extent, and it’s now common for individuals to head over to the web to become active traders in their own right. It’s also had an impact on financial fraud prevention, too – while it has impacted corporate finance through recruitment, payment clearing and more. This article will explore all of these changes.
In the not too distant past, it was widely assumed that trading was something only for those located in financial centres and, often, only for those with the appropriate contacts and connections to get the right jobs. But in the last 20 years or so, that has all changed. It’s now the case that almost any adult with an internet connection, a bank account and the appropriate forms of identification can sign up to a broker’s platform and start trading. Brokers including fxpro are popular in this regard, and with ease of use and diverse trading options on the go, it’s simple to see why so many people have decided that trading online is more streamlined than pursuing it as a career would be.
That doesn’t mean, of course, that everyone who signs up to trade will be successful. That’s a completely different question, and one that is not entirely recognised by those newbie traders who assume that it’s a get rich quick scheme. But the reality is that access to trading, at least, is much more democratised than it ever has been in the past.
Financial fraud prevention
Financial fraud is something of a double-edged sword when it comes to the use of trading tech. On the one hand, the phenomenon has in some ways found a new home with internet-based brokers and it has become easier in some ways for criminals to reach people who are vulnerable to being scammed. But technology has also liberated traders from one of the most common reasons for fraud, which is lack of knowledge about the problem.
Many regulators in countries around the world now offer lists of financial and brokerage organisations which are believed to be scams, and it’s easy to access them as a trader either through Google or through direct URLs. Back in the day, there may not have been technological avenues for scammers to go down like there is now – but there were certainly fewer easy ways for traders to get the information they needed to defend themselves.
And it’s not just retail or day traders who have benefited from the technology boom. In many ways, corporate finance has also enjoyed a rise in its fortunes thanks to tech. Some of this has been as a result of a financial application of a general tech trend. The rise in the use of LinkedIn, for example, has solved some of the recruitment bottlenecks that financial firms had faced in the past. And specific “fintech” innovations have also helped. Everything from faster payment clearing times to real-time foreign exchange rates have become accessible at the tap of a phone or the click of a mouse. As a consequence, many financial institutions are reaping the rewards in the form of improved efficiency and fewer overheads on historically expensive, clunky or long-running transactions.
The financial industry has certainly not been exempted from the rapid march and effects of technology. From the developments in personal and retail trading to the impact it has had on fraud prevention, the benefits have been both profound and diverse. And it’s especially important to note just how much the corporate financial industry has changed as a result of this development, it’s now far more likely that the tech-related changes to finance will stick around as the big firms continue to realise just how efficient and more profitable technology can make their business.