Is your investment platform out of date?
Digital investment platforms are changing the way investment is being done. Earlier, most retail investors were averse to the process of trading and investment. The reason for this averseness stemmed from the tedious process of involving middle-men (such as brokers). With digitalization, investors could now open a trading account instantly.
The first perk of a digital investment platform is that there is absolutely no paperwork involved and the entire Know Your Customer (KYC) process can be completed online. However, it is important to choose a platform that is abreast with the latest advancements in technology and functionality.
Does your digital platform provide all the possible technological benefits? A retail investor can now trade in stocks, invest in mutual funds, corporate fixed deposits, gold, and trade in derivatives on his computer or smartphone. Latest trading platforms use technology that makes investments flexible and offers many benefits to the investors.
Technology has made it possible to invest in instruments of your choice at anytime and anywhere. The job of a broker has become redundant as all the information is now available at your fingertips. One can easily invest and divest in tandem to changes in the market, allowing freedom of decision and plenty of choices.
- 1. Saves time
- 2. Security
One can be assured of their money being secure as transactions on digital platforms are foolproof and transparent. The possibility of any kind of risk in terms of theft of identity, personal information, or funds is reduced.
- 3. Research tools
Almost every online trading platform has free research tools. These tools give exact information regarding the performance of your investments in the present, as well as estimate how they will fare in the future. Depending on the information fed, these tools calculate your insurance premiums, returns on mutual fund, and growth of your investments in fixed and recurring deposits.
- 4. Brokerage fees
Due to the elimination of middle-men and other intermediary processes, one need not pay a high brokerage fee in terms of commission. Nowadays, a lot of brokers charge a flat fee on orders.
- 5. Robo-advisory
The latest development in digital platforms is robo-advisory. It is making substantial inroads in most developed economies. Robo-advisors provide financial planning services with little or no human supervision. These services have been derived from automated algorithm-based analyses. Robo-advisors capture information about the clients' income, financial needs, and future goals. Using this information, they devise a suitable investment plan, customized specifically for an investor.
Moreover, robo-advisors are capable of offering portfolios based on smart algorithms and statistically driven calculations. They eliminate the emotional aspect that personal advice is prone to, thus, completely removing bias while making investment decisions. They are also a boon to inexperienced investors as they automate the necessary steps of form filling, KYC requirements, signatures, and investing.
However, there are some challenges that robo-advisors face. Robo-advisors cannot monitor, balance portfolios, track stocks and make market calls. However, by using artificial intelligence and high-end technology, like machine learning and big data, these challenges can be overcome.
The government of India has created the "India Aspiration Fund" with a corpus of Rs2,000cr to boost digital economy. This fund aims at curtailing capital market constraints to growth by enabling and creating a framework for digital firms. India's investment policy aims at modernizing rules to allow technology-driven innovations in emerging sectors to aid investments.
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