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Fin Tech

Transforming Financial Literacy: A Digital and Tech Journey

Written by Hritik Rajora on Digilah (Tech Thought Leadership).

In the fast-evolving landscape of technology, my journey over the last five years in the startup realm dedicated to making India financially literate has been nothing short of transformative.

As the founder of Stock Tutor platform a mission-driven initiative, my commitment to providing valuable insights into the stock market with the right approach has been significantly enhanced and challenged by the relentless march of digital and tech advancements.

The Digital Revolution:

The advent of digital technology has been a game-changer for our startup’s mission. Five years ago, our approach to financial literacy was primarily reliant on traditional methods like in-person workshops and printed resources.

However, the digital wave has reshaped our strategies, enabling us to reach a broader audience more effectively.

1. Online Learning Platforms:

The rise of online learning platforms has allowed us to extend our reach beyond geographical constraints. With a plethora of reliable resources available at our fingertips, we’ve been able to create comprehensive and interactive courses on the stock market.

This shift has democratized financial education, making it accessible to anyone with an internet connection.

2. Data Analytics for Personalized Learning:

Tech-driven data analytics has empowered us to provide a personalized learning experience. By analyzing user interactions with our platform, we can tailor content to individual needs, ensuring that each learner receives information at their pace.

This has significantly improved engagement and retention rates among our audience.

Overcoming Challenges:

While the digital transformation has brought about numerous benefits, it has not been without its challenges.

The pace at which technology evolves demands constant adaptation, and staying ahead of the curve has been a continuous endeavor.

1. Cybersecurity Concerns:

As we transitioned into a digital-first model, cybersecurity became a paramount concern. Handling sensitive financial information requires robust security measures to protect our users. Implementing and maintaining state-of-the-art cybersecurity protocols has been an ongoing challenge, demanding constant vigilance and investment.

2. Tech Skill Gap:

The rapid evolution of technology has highlighted the need for a workforce equipped with relevant tech skills. Bridging the gap between traditional financial expertise and digital acumen has been an ongoing challenge.

Investing in training programs for our team has been crucial to staying competitive in a tech-driven landscape.

Leveraging Thought Leadership:

In the pursuit of our mission, establishing thought leadership has been instrumental. By staying at the forefront of industry trends and technological advancements, we have positioned ourselves as pioneers in the intersection of financial literacy and technology.

1. Educational Technology Partnerships:

Collaborating with educational technology companies has been a strategic move. Partnering with tech innovators has allowed us to integrate cutting-edge tools into our platform, enriching the learning experience for our users.

These partnerships have also enhanced our credibility in the industry.

2. Content Innovation:

Embracing technology has opened up avenues for innovative content delivery. From virtual reality simulations of stock market scenarios to gamified learning modules, we have explored diverse ways to make financial education engaging and effective. This commitment to innovation has set us apart as thought leaders in the space.

The Future of Financial Literacy:

Looking ahead, the digital and tech journey in the financial literacy space promises even more exciting possibilities. Emerging technologies such as blockchain, artificial intelligence, and augmented reality hold the potential to revolutionize how we educate and empower individuals in the realm of finance.

1. Blockchain for Transparent Transactions:

Exploring blockchain technology can bring transparency to financial transactions.

By incorporating blockchain into our curriculum, we aim to educate users on the decentralized and secure nature of this technology, fostering trust in financial systems.

2. AI-Powered Financial Advisory:

Harnessing the power of artificial intelligence for personalized financial advisory services is on our roadmap. Integrating AI algorithms can provide tailored investment recommendations based on individual risk profiles, making financial decision-making more informed and accessible.

In conclusion, the digital and tech journey has been instrumental in reshaping our startup’s mission to make India financially literate.

The advantages of online platforms, personalized learning, and thought leadership have propelled us forward, overcoming challenges such as cybersecurity concerns and the tech skill gap.

As we look to the future, embracing emerging technologies will further enhance our ability to empower individuals with the knowledge and skills needed to navigate the complexities of the stock market and financial landscape.

Most searched questions

What is Stock Tutor?

What are stocks?

Most searched queries

Stock market

Financial literacy

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Revolutionizing Fintech: The Impact of Generative AI

FinTech

Written by Dinesh Ghembad on Digilah (Tech Thought Leadership).

Generative AI, a facet of artificial intelligence creating content from scratch, is rapidly reshaping industries, particularly fintech. Fintech companies are swiftly incorporating generative AI, reaping transformative benefits across various domains.

Fraud Detection and Prevention:

Generative AI addresses fraud through pattern recognition in financial transactions. From detecting fraudulent credit card transactions to insurance claims and loan applications, generative AI algorithms significantly enhance security measures.

Credit Scoring and Risk Assessment:

Generative AI elevates credit scoring by considering a broader range of factors, including employment history and income. This not only reduces bias but also broadens access to credit for a more inclusive financial landscape.

Algorithmic Trading:

Generative AI empowers algorithmic trading, automating decisions based on market data. This enables traders to make informed decisions, optimizing returns and contributing to more efficient financial markets.

 Personalized Financial Services:

Generative AI tailors financial services by creating custom investment portfolios, offering personalized financial advice, and enhancing customer support. This customization ensures a more engaging and satisfying experience for users.

Automation and Decision-Making:

Generative AI automates tasks, freeing up resources for more strategic activities. Simultaneously, it enhances decision-making by providing insights that are often challenging to obtain through traditional methods, such as predicting market trends and assessing credit risk.

Enhanced Security:

Generative AI strengthens security measures by detecting and preventing attacks. This ranges from identifying fraudulent transactions to safeguarding data from unauthorized access, contributing to a robust cybersecurity framework.

Benefits of Generative AI in Fintech:

Generative AI improves efficiency by automating tasks and providing valuable insights, reducing costs, enhancing customer experiences, and ultimately boosting revenue. Its multifaceted advantages make it a crucial element in the evolution of fintech.

Challenges of Generative AI in Fintech:

While promising, generative AI faces challenges such as complexity and potential bias. Addressing these challenges is essential for its responsible and effective integration into the fintech ecosystem.

Real-life examples:

  • Wells Fargo’s Predictive Banking Feature uses generative AI to predict customer churn and offer personalized incentives to keep them engaged.

  • RBC Capital Markets’ Aiden Platform uses generative AI to generate research reports and financial models, which can save analysts hundreds of hours per year.

  • PKO Bank Polski’s AI Solutions uses generative AI to detect fraud, automate customer service tasks, and provide personalized financial advice.

  • Cleo is a financial virtual assistant that uses generative AI to help users budget, track spending, and pay bills.

  • Crediture is a credit scoring platform that uses generative AI to assess creditworthiness and offer customized lending options.

These are just a few examples of how generative AI is being used to improve the fintech industry. As the technology continues to develop, we can expect to see even more innovative and groundbreaking applications of generative AI in fintech.

Conclusion:

Generative AI is revolutionizing fintech, offering a spectrum of benefits. As companies embrace their potential, navigating challenges becomes crucial for responsible and impactful integration, ensuring a positive impact on businesses and customers alike.

References:

https://newsroom.wf.com/English/news-releases/news-release-details/2018/Wells-Fargo-Adds-AI-Enhancement-to-Mobile-App-Giving-Personalized-Account-Insights-to-Customers-Nationwide/default.aspx

https://www.rbccm.com/en/insights/story.page?dcr=templatedata/article/insights/data/2021/06/rbc_to_expand_ai-based_trading_platform

https://en.media.pkobp.pl/127989-pko-bank-polski-as-the-digital-transformation-leader

https://web.meetcleo.com/budget

Most searched questions

What is generative AI?

How can generative help in reducing risks in finance?

Most searched queries

Generative AI

Automation

Fintech and AI

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Tech to help investors make the right decisions

investments

Written by Danielle Teboul on Digilah (Tech Thought Leadership).

Technology has become so integrated in our day to day lives, I believe it has totally changed the way I do business. Not only this, but it has also helped my clients in gaining more knowledge and confidence in what they are investing in.

This in turn, has helped me in my business, as I believe that knowledge is key to success. I am a Personal Wealth Manager who specializes in bespoke financial planning for clients in Singapore, blending personal and professional financial advice with all-important tax planning.

I wanted to share with everyone that platforms and tools I currently use to help my clients, plus some tools that the everyday investor can use to successfully plan, visualize and research your investments and finances.

FE Analytics

This online platform is a complete game-changer for me. FE Analytics is more worthwhile for financial planners, investment analysts and others in the finance space.

The subscription fee is quite substantial, but it is an invaluable tool. I use it to create portfolios for clients, review and project investments and compare their current portfolios with bespoke ones I have created for them.

What I love about this platform is that it will gather global data, from companies like Bloomberg, Yahoo Finance and others of the sort, to compare key investment data points. To name a few such as performance vs. benchmark, volatility, risk and even ESG rating.

Volatility and risk are an excellent thing to show to clients, as they can clearly see how erratic their investments are in comparison to their performance.

In today’s ever-changing world, many of my clients are become more conscientious and circular economy-focused, so being able to show an ESG rating adds value to them.

Even though an average investor may not have access to this platform, it is important to know that every legitimate investment will have a code, which can and should be easily found on websites, such as Yahoo Finance.

So that clients can clearly see the funds’ performance, fees and charges, and have full transparency in information of the investment. If you cannot find this number, or there is no information online about your investment, this could be a red flag.

OPAL Fintech

OPAL is one digital business account for your business and financial needs.

I really enjoy using this platform because it is a perfect visualization of a person’s goals, dreams, aspirations and current situation.

All I have to do is input a client’s cash flow, assets, debt, and then discuss with them their financial goals. This may be plans for retirement, saving for a property, planning for a child’s education, or even leaving a lumpsum for their family when they pass on.

The OPAL algorithm will assess their current situation, factor is real-life data, such as inflation, and project how likely it is for that goal to happen.

Then, it can be tweaked and adjusted, showing multiple scenarios depending on how much the client is setting aside into investments.

I often feel like, because financial planning is very numbers-heavy, people can find it difficult to visualize their goals clearly. I don’t have that issue with OPAL, because the graphics and projections perfectly paint the picture for the client.

Budgeting Platforms

But what if you do not have access to these paid platforms?

 I would first off recommend tracking your cashflow on a monthly basis and being conscious of your assets vs. debts.

There are loads of budgeting apps that you can use. For example, DBS Online Banking has an interface that illustrates your monthly inflowing cash and outgoings.

If you’d like something a bit more in depth, so that you can go through these figures with a find-toothed comb, I recommend apps like Zenmoney, Monny or Spendee; all of these (and one’s similar) are free and user-friendly for the consumer.

Some will consolidate your spending habits into presentable data and graphics, others will incorporate some gamification in order to encourage you to hit your spending and saving goals.

There are many on the market in Singapore, and you just have to play around and find whatever works for you.

I prefer to use the DBS NAV Planner paired with an Excel spreadsheet, but others may prefer the other apps mentioned here.

Stock Screener

If you are investing in individual stocks, or if your portfolio comprises of equities, you can always use stock screeners to check key analytics like the market cap, yield and sector.

You can also delve further into the figures and statistics, like viewing the past 5 years performance and other metrics.

You can also check company announcements and financial statements, which is perfect for those investors that like to research in depth. For Singapore stock exchange, you can use https://investors.sgx.com/stock-screener.

General Learning & Boosting Your Knowledge

As I mentioned at the start of my article, knowledge is power.

If you don’t have a basic level of knowledge, this is quite often the blockade that is stopping you from investing, which means that your money is being eroded by inflation.

 You may be concerned of misinformation out there, but don’t worry, there are many great, informative platforms you can use to educate yourself.

The first is Investopedia, which is essentially a Wikipedia for all things money and investing. Here you can find simple to understand financial concepts, investment terms and even information on past historical events in the finance world.

The Balance is a great website that hosts a wide range of information, from which loans give the best rates, what stock market apps are easy to use, to how to discuss finances with your children.

This is really a font of knowledge and a go-to for anyone who just wants to get more clued up on finance. I would of course recommend keeping yourself up to date with news by checking out The Financial Times, Bloomberg and CNBC, as well as other credible finance media outlets.

In conclusion

In this world of technology, finance and investing have become accessible to the masses; what once seemed only for the super-savvy or wealthy, is now at the click of a button to almost everyone who owns a computer or smartphone.

This readily available information is not something we should shy away from; these are wonderful tools we can use to do our own due diligence and ensure that we are planning our finances and investments correctly.

Technology has pushed for a need for transparency in the finance sector, so what a better time to start investing! You have all the knowledge, resources, and tools to do so responsibly, and with some level of understanding.

However, for those that are not as savvy, or for those that have a full schedule, you may not have the time to commit to constant research. I don’t blame you- if it wasn’t my full-time job I probably wouldn’t either!

This is when you can lean on the advice of a professional, who will have all these tools at their disposal, with the added expertise and wisdom to help you navigate investing effectively in accordance with your risk tolerance and unique circumstances.

(Remember that if you are struggling to find information available online of an investment, to tread lightly, as a lack of transparency may also mean a lack of legitimacy.)

Most searched questions

What are stock screeners?

How helpful is using various technologies for investments and finance?

Most searched queries

Bloomberg

Investopedia

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Social Trading and Its Implications: A Financial Technology Market Research Perspective

trading

Written by Ju Jian Ngiam on  Digilah (Tech Thought Leadership).

Social trading is a form of investing that enables individuals to observe the trading behavior of their peers and expert traders, and to follow their investment strategies using copy trading or mirror trading.

It democratizes access to financial instruments such as options, as traders can make decisions based on other traders’ actions rather than analyzing raw financial data, which they may not have the time or ability to do so accurately.

While social trading provides a platform for investors to learn from and mimic other traders, copy trading is a specific subset of this broader concept.

Copy trading is an automated process where an investor’s account mimics the trades of a chosen trader automatically.

Social trading requires more involvement and understanding, allowing investors to pick and choose specific trades to follow rather than copying all trades from a specific trader. In some cases, social traders can make the opposite trade of the expert they are following if the trader has a bad reputation.

An example would be the anti-ARK Innovation Fund (ARKK) exchange traded fund, Turtle Short Innovation ETF, otherwise known as SARK. The ARKK Fund was once a respected exchange traded fund, but due to poor performance in recent years, an exchange traded fund called SARK was created to short the ARKK. The fund went up by 75%, while ARKK dropped by 50% in 2022, proving its mettle in the financial industry.

Key players in the social trading space include eToro, Moomoo and Robinhood, among others. These platforms provide a wide array of investment options, from foreign exchange and stocks, Exchange Traded Funds (ETFs) to cryptocurrencies, and attract traders of all skill levels. High Frequency Trading (HFT) firms like Tower Research, Domeyard are also relevant, as they employ sophisticated algorithms that execute large quantities of trades within split seconds, often at the expense of retail investors.

Social trading’s main benefit is its ability to leverage the collective knowledge and experience of a community of traders, otherwise known as the wisdom of the crowd.

It allows inexperienced investors to learn from more seasoned traders, potentially mitigating some risks associated with lack of knowledge.

However, social trading also carries significant risks. Copying a strategy without understanding its underlying mechanism can lead to substantial losses, especially in volatile markets. There’s also the risk of following traders who themselves may not be competent or who may be driven by emotions.

Furthermore, the tactics of HFT firms can distort market information, leading to accusations of market manipulation through their tactic of “Quote stuffing”.

“Quote stuffing” in essence is placing mass orders of trades and cancelling them last minute, with the intention of overwhelming competitors by having them process the orders and cancellations.

At its worst, this tactic caused the Dow Jones Industrial Average to fall by 1,000 points in a few minutes in 2010. However, these firms are necessary market liquidity providers, accounting for 50% of all equity trades in the United States as of the present.

Hence, social trading platforms such as this company, FollowTrade should have risk management features that can safeguard consumers such as stop limit orders for their own good.

My deep fascination with the intersection of finance and technology is my primary motivation for being in this space.

It led to me completing a certificate in Financial Technology at HarvardX, an online learning initiative by Harvard before matriculating. I learned about strategies like High Frequency Trading and intend to delve deeper.

My understanding of the industry’s intricacies, such as the tactics employed by HFT firms and the complexities of trading as a finance undergraduate has equipped me with a unique perspective.

This offers an unparalleled opportunity to further my knowledge and contribute to the dynamic fintech landscape. I am excited to apply my skills and passion to real-world research and look forward to the valuable experience this promises.

Most searched questions

What is copy trading?

Is copy trading legal?

Most searched queries

Exchange Traded Funds (ETFs)

High Frequency Trading (HFT)

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The Evolution of Financial Payments

Written by Salim Hussain on Digilah (Tech Thought Leadership)

It is a paradox of our lives that some of the most common of actions underlying a functioning society are left virtually untouched by advancement as civilization marches forth to Metaverses and recyclable rockets. An example is how Education has operated historically – a source of knowledge (teacher/computer) facing a collective of students, dispensing knowledge. The dispenser may vary but the fundamental construct remains unaltered. But the one I want to focus on today is the act of making Payments. Yes, payments…the industry that is supposedly being disrupted with an onslaught of payment tech start-ups touting nosebleed valuations. But if one peels away the slick interface and looks into exactly how the payments course from one end to the other, you will inevitably run into technology which was built when Mash was still on air and “Bloody” a bad word!…

Let’s think of a situation where a corporation say Nike, needs to pay its suppliers in Vietnam called VietShoe. Nike instructs it’s bank to make a payment in VND to its supplier bank account. Nike is shown a FX rate by the trader at Nike’s bank, “Banque de Zapatas”(BDZ)…there follows a little negotiation… then finally the golden word “done” is said/typed. The next stage is for the operations people then deduct the USD100 from Nike’s account in the US and initiate a series of steps whose desired outcome is to get the VND equivalent of USD100 (about 2,250,000 VND at current rates) credited to VietShoe’s account.

FX markets are the largest component of capital markets with a daily trade volume is 6.6 Trillion USD (the equivalent number for equities is 0.5 T and bonds is 4.7T). hence, there are hundreds of thousands of such Nikes making millions of payments to the Vietshoes of the world every day! The scale is mind boggling.  The good news is that there is a method to the madness. There is a common platform and a common language which banks can speak to each other. And a central organization creating rules for this superhighway, so these trillions can move around seamlessly. That organization is a member owned cooperative called SWIFT (Society for Worldwide Interbank Financial Telecommunication). This was set in the 70s! And is still the backbone of the vast majority of the 6.6T being transacted every day.

% Turnover

I will give you a brief taste of the gymnastics involved in the example above.

1.Once the rate is agreed with Nike, Bank NY needs to let it’s partner bank in Vietnam called Bank VN (termed “onshore bank” in the Trading Room) two things – One, the identity of the Beneficiary and it’s bank account details and Two, the amount to be transferred. This is done using a MT 103 Swift format file.

2. Once Bank VN receives the request, it will debit the account BDZ maintains with it for 2,250,000 VND and credit the ultimate beneficiaries account.

(I am making a number of simplifying assumptions here like the presence of “nostro” account as well as absence of routing banks. These can be the subject of another future note.)

The route above, is how most fintech apps work today. If evaluated by a tech person, she will be aghast at the usage of flat files, and, in a minority of cases, API calls (which will be the subject of future write ups). Now, take a step back and juxtapose the promise of blockchain technology to this archaic construct… suddenly, The Swift system, if imagined as an entry on a vast netted ledger, across multiple counterparties, begins to resemble a classic blockchain construct.  And the realization comes that this is the exact point where the technology should be deployed and has not, for the most part, been deployed. For it remains mired in producing Dogecoin’s and NFTs to make use of those Dogecoins!!