Anybody can trade stocks these days, whether from a computer or smartphone. But that doesn't mean that they should. Certain things — financial investing top among them — should be left to the professionals. Also in that category is financial trend predicting, which isn't a hobby or job for amateurs.
That's why we've turned to these industry insiders, who lent us their view of the technologies that are most shaping the future of investing. Here's what they have to say:
1. Bryan Stolle, founding Partner at Wildcat Venture Capital
“The confluence of software built on cloud, mobility, AI and machine learning will unlock trapped value across the business landscape – from fintech to enterprise SaaS to healthcare to education technology to real estate to insurance to literally every other pocket of the business landscape. I recommend keeping an eye on the latest enterprise listings as they come to market. You’ll see this holds to be true for those as well. For all the glitz and glamour and saga-like trials of the Lyfts and Ubers, you have companies like Fastly, Zoom Video Communications and PagerDuty that are raising spirits as they take off. That’s where I’m putting my money and I’m betting that others are following suit as the investment climate shifts away from consumer and back to business.”
2. Yaron Golgher, co-founder and CEO at I Know First Forecasting
“The rise of AI and is re-shaping the world, and the investment industry is no exception. Deep Learning algorithms can scrape the Web for unstructured data and derive insights from it, providing the investors with volumes of actionable intelligence. Unmatched in their ability to process huge amounts of data and build complex mathematical models on the go, AIs bring scores of new possibilities to the table, all the way to downright forecasting stock market dynamics. And with the new generation, that of digital natives, hungering for high-tech solutions, the industry will have no other choice but to deliver.”
3. Damien Cabadi, CFO at Spirit Asset Management
“The blockchain technology has still to prove how much impact it could have. Stock exchanges benefit from positive network effect that protects them. However, their high margins are the reason why such technology could have an impact. New assets could also be digitized and expand the size of the investment market.”
4. Mik Breiterman-Loader, CEO of Vestive
“One of the more significant advances is the power of data and reporting. Technological advances has made so much more data available, and the ability to process and analyze this data has become vital. This has significant implications for evaluating a company's environmental and social impact. A decade ago it was near impossible to evaluate a company on the sustainability criteria we are able to today, and a huge part of that is big data and our ability to analyze it.”
5. Ruslan Gavrilyuk, co-founder and President of Kepler Finance
“Blockchain unlocks previously unavailable funds. Big companies turn real estate into digital assets, and the average Joe can digitize his property and be able to rent it out in a fragmented manner. Even the pieces of art or Intellectual rights are undergoing digitalization. Peer-to-peer cryptocurrency loans are gaining popularity where small investors can benefit from unused Bitcoins or other cryptocurrencies. Immutable Blockchain database makes it possible to eliminate middlemen, and store transactions on chain making due diligence and asset servicing cheaper and manual labor free. Investors face more incentive to place transactions due to reduced costs and decreased settlement time.”
6. Keren Moynihan, co-founder of Boss Insights
“If greater transparency could be achieved in private companies, it would become possible to evaluate and rank the companies and offer this information to the general public.
By reducing the risk associated with each investment, artificial intelligence and data science can make private investment more accessible to a wider range of investors. Rather than excluding retail investors, implementing new technology to address the valid risk concerns creates a more inclusive environment for all investors.”
7. Adrian Enache, CEO at Angels Den Funding
“I believe that investing will be reshaped by AI. More specifically, machine learning models will take into consideration much more than data related to the start-up and its industry. Based on signals that were never used before, we will be able to accurately map the potential of a start-up. AI has the potential of calculating the company’s chances of success by including new sets of data in its models. It will then be able to make suggestions to investors. The first to reach this point are the platforms which have the right data and the success rate associated with it.”
8. Patricia Russell, CFP, Investment Advisor and founder of FinanceMarvel
“Artificial Intelligence (AI) will have the biggest impact on the investing industry. Some of the top investment firms in the world are already using machine learning to suggest certain portfolios to their clients. Some firms also use machine learning to make predictions about the direction that a stock will take. Firms are also using AI to make self-driving cars. These cars use a chip that is programmed to learn and adapt to road conditions and passenger preference when driving.
AI is still a new technology, but it already shows great potential. With
time, it could do more for the investing industry. Perhaps, we could
witness new forms of investments or financial instruments.”
9. Ben Fraser, VP of Finance at Aspen Funds
“Investing through crowdfunding platforms is just getting started. There has already been a massive amount of money be raised through crowdfunding. But the passage of the JOBS Act of 2012 has fundamentally changed how individual investors can invest. Crowdfunding is no longer just “pre-buying” a trendy product on Kickstarter. Investors can now directly invest in a startup or an existing business, various types of real estate, peer-to-peer lending and other specialty investments. The individual investor has never had more control in where they invest their money, and the possibilities will exponentially continue to grow.”
10. Anatoliy Knyazev, Executive Director at EXANTE
“If we do achieve the freedom of capital movement globally, investment firms
will face a much more competitive market where their entrenched positions will be undermined by smart startups. The current regulatory capture that favors big established players might have exhausted it's growth potential.”
11. Jeff Marsden, Chief Product and Strategy Officer, Xtiva Financial Systems Inc.
“AI can change the game in many ways. It can optimize and scale and provide real leverage. It will make those who embrace it materially more focused on the value they add to the process. Everyone from DIY stock pickers, to passive index investors to large institutional portfolio managers will benefit from a new generation of smart, data-driven tools to assist their investing by delivering massive process, monitoring and decision-making leverage. Not to be left out, the retail advisory industry is starting to leverage machine learning and AI to aid human advisors in providing relevant advice that is personalized to their clients’ unique needs and risk profiles.
Humans making investment decisions on their own will be no match for humans augmented by data-crunching AI to help overcome behavioral biases.”
12. Izet Elmazi, Senior Portfolio Manager, Bristol Gate Capital
“We believe the advancements made in the field of data science and machine learning will have one of the largest impacts on the industry given the abundance of data in finance. It is estimated that 90% all data captured since the beginning of time was created in the last two years. Gaining insights from that data is increasingly viewed as a competitive advantage. If they have adopted it at all, today most investment professionals using machine learning are applying it to short-term predictions or trading applications. Going forward we see these tools being incorporated in long-term fundamental predictions as well as other areas of business such as operations and compliance.”
13. Cheryl Cheng, General Partner at BlueRun Ventures
“Artificial intelligence and machine learning will be the technologies that have the biggest impact on the investing industry. In 2017 and 2018, it seemed that every business plan that came across a VC's desk had the magical words “AI and ML” in them. While very few of young starts pitching AI and ML were actually deploying artificial intelligence and machine learning, this wave of technology will have immeasurable impact on the investing and technology industries. We are now in the data world and data is king. Data is the life blood for AI systems. AI holds the promise of helping humans do tasks better: doing mundane tasks tirelessly and with more accuracy and augmenting human decision making in complex arenas. Machine learning is even more powerful. The next generation of companies will be built on the backs of data, AI and machine learning. More importantly, on the global stage, there is a race for developing world class AI systems.”
14. Logan Allec, CPA and Founder of Money Done Right
“Believe it or not, I think that mobile technology will have the biggest impact on the investing industry. Nowadays, people can literally invest in a stock, bond, or mutual fund from their phones! Unfortunately, there's a downside to this accessibility as well: with a few taps on their phone, a new investor can lose thousands of dollars on a risky trade. I think the
investment companies that win in the end are those that can balance the mobile consumer's I want it now mentality with protecting the consumer from themselves through smart investment options.”
15. Chris Rawley, CEO of Harvest Returns
“The increasing number of online funding platforms can provide investors with easier access to private placement opportunities formerly only available to institutions, like hedge funds or university endowments. These platforms allow direct investments or lending into a variety of asset classes, from real estate, to collectible art, to agriculture. The benefit of these alternative funding websites is that investors can diversify their portfolio with assets that are not correlated to the stock and bond markets.”
16. Mark Furmanek, Chief Operating Officer at Dillon Gage Metals
“The rise of asset-backed digital tokens, specifically gold-backed tokens, are forming one of the most exciting asset classes in decades.”
17. R.J. Weiss, CFP, founder of The Ways to Wealth
“We've seen companies like Apple, Disney, and Amazon invest billions of dollars to make spending money with them as easy as possible (Magic, Apple Pay, One-Click Buy). This idea of making spending frictionless to the consumer no doubt has increased these companies profits.
However, one can also take this same concept and apply it to saving. We're starting to see this with third-party tools like Digit, which uses their own AI, to determine how much one can save then withdraws that amount from checking to savings (or to pay off debt). As of now, using AI to help one save isn't something the big investing institutions incorporates. However, with millennial investors, the idea has really caught on and I expect to see it more widespread in years to come.”
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