In the investment world, information and processes are key, and technological innovations are facilitating the smooth flow of both. Indeed, the investment world has adapted itself successfully to modern technology and, consequently, has evolved in new directions, transforming investing and investment management in ways that previous generations would have not imagined.
Investors, whether at an institutional or individual level, have come to increasingly rely on IT solutions to improve portfolio construction and management as well as analysis of investments. At an institutional level, IT solutions have also been adapted to develop tailored services for clients. Investment managers know that putting the best available client services in place is critical if they are to attract and retain clients and manage their assets to an optimum level.
With so much information about investment markets and individual investment options available, it is good to know that technology is enabling information providers to gather what they have in a single application for investors to use. This is where a site like Crunchbase comes into play. Imagine that an investor wants to know about Fisher Investments, the global money management firm, and what services it offers. With Crunchbase, investors can track start-up activity using a comprehensive database of people and companies maintained and updated by contributors numbering in the tens of thousands. For example, the entry on Crunchbase about Fisher Investments not only shows company information and contact details, but also displays the investments that Fisher itself has made in start-up companies. Crunchbase is a great example of how information can be harnessed using technology to inform investors about market activity. A key feature of Crunchbase is that it has been licensed under Creative Commons, meaning that it is accessible to anyone who has registered for the purpose of contributing data. The dataset remains open to its community of users and is accessible to partners. This kind of accessibility is only possible using the power of technology.
Of course, the power of technology is apparent across all aspects of the investment spectrum. This is especially true of the Internet and its applicability to the investment world. The example of Crunchbase is indicative of how the Internet has been harnessed to provide investment information, which is now much easier to gather than ever. Before the Internet, an ordinary investor would likely have had to visit his or her local library and borrow books dealing with the financial world or look for information on stocks, bonds and other investment vehicles. Another option would have been to seek out information from companies themselves, which could prove costly in terms of postage and might not arrive for some time. Using the Internet, investors can now access online company reports via the Securities and Exchange Commission immediately after the report has been made available and can search through the information provided using keyword searches to isolate the information they require to make an informed investment decision.
In addition, there are hundreds of websites that compile and make available information that investors can analyze. A challenge for investment managers, large and small, is ensuring that investors are simply aware of them in what has become a crowded marketplace. The emergence of social media – Facebook and Twitter being just two such platforms – affords investment managers the opportunity to promote themselves across platforms that are accessed by ordinary investors. A clever digital marketing strategy positions a firm to appeal to a wider base of clients and ensure that they are the first name that springs to mind when clients are thinking about a particular service, such as trading stocks and shares or constructing an investment portfolio.
Leveling the playing field through technology applies to the costs of investing as well, and retail investors have enjoyed a fall in the price they pay for conducting trades, thanks to the proliferation of online brokers and trading platforms. That trading platforms have become much speedier also benefits investors who use traditional brokers, because those brokers have access to platforms that allow trades to be conducted in milliseconds, to the benefit of clients seeking to execute trades at the best possible price. However, it is about much more than just the Internet when it comes to executing faster trades. Purpose-built applications through which these platforms run and the availability of fiber-optic communications are ensuring that trading platforms are becoming faster and more efficient. None of this would have been possible without the evolution in computing power and the good old microchip.
As technology continues to evolve, the investment world will undoubtedly continue to adapt it for its own particular needs.