Financial Information Systems

With Robo advising achieving the main stream status, there are many newcomers coming up with innovation and old ones striving to catch up. Here lets discuss about few rob advisors in the market which offer high net return for low investments.

Betterment and Wealth front are considered to the best ones in the market with low management fees and good minimums. They are quite easy to use with their interactive interfaces.Most of the consumers prefer them for their low account minimum features,making it accessible to many. They offer diversified portfolios with tax loss harvesting and automatic rebalancing.These services differ in their fee structure. Wealth front offers flat fee with whereas betterment offers a tiered payment structure where it reduces fee for higher account balances.

There are efficient rob advisors which manage the portfolio free of charge like WiseBanyan and charlesSCHWAB. These are not completely free, they carry few expenses in funds and trades.
Vanguard and Personal Capital offer hybrid services which offer both human advisor and computer based advices. But these have high account minimum fees,but they offer personalised services.For taxable accounts, wealth front and personal capital offer high optimisation and tax efficiency for taxable accounts. Betterment and fidelity go offer the better services for retirement plans.

Major players like Wellsfargo are also venturing into the Robo-advising field to capitalize on the growing oppurtunity.

Source:
https://www.nerdwallet.com/blog/investing/best-robo-advisors/

What the Article Says:

This article discusses Fintech and how it’s growth effects businesses and consumers of England. As the technologies emerge and flourish to produce better-targeted services with lower pricing, banks are taking advantage of “lower transaction costs, improved capital efficiency and stronger operational resilience.” When discussing its tangible benefits, the article honed in on the specific case of mobile banking. While the government must be aware of the numerous potential risks, mobile banking is becoming more flexible for businesses and consumers. Peer-to-peer lending is expanding, wholesale banking is shifting to order-driven trading, and the technologies are improving efficiency, accuracy, and security of mobile banking processes.

My Thoughts:

I think this article takes a good, unbiased approach on analyzing Fintech in England. Rather than focusing solely on the positive effects that most people see, it brings about major questions for people to consider, such as “What implications are there for the aggregate level of operational and cyber risk in the financial system?” These are questions that regulators have to address, as there are several potential fraud and privacy threats when it comes to fintech such as mobile banking.

Source: https://www.cryptocoinsnews.com/bank-of-england-governor-fintech-brings-great-promise-and-risks/

Link to the full Article:

http://www.forbes.com/sites/shelliekarabell/2017/01/29/sharing-economy-nice-but-does-it-create-real-jobs/3/#8dc39ff4f1e4

The Sharing Economy Main Sectors:

1. Travel
2. Transportation
3. Finance
4. Labor
5. Streaming

The sharing economy has become a booming source of services and revenue in the market. Airbnb has an estimated value of $30 billion and Uber is estimated at $68 billion.

The question now becomes is this a “phenomenom” or is it a necessity in our growing world. Shellie Karabell, describes the sharing economy as “changing the way established businesses work.”

“The sharing economy is requiring on-demand insurance” Denis Duverne

Sharing economies allow people to provide services or goods to customers with little or no capital. It also removes the needs for business organization such as managers and associates, you are your own boss.

While the sharing economy has become an extra source of income or a full-time job for some people. What is the effect on the economy as a whole? It brings the question of liability and consistency.

For example, if you were to become an Uber driver and you pick up a passenger and for whatever reason the passenger gets hurt because there was a car accident, Who is held liable? Uber or the driver? While Uber is a business, to what extent are the Uber drivers known as self-contractors compared to employees?

While the sharing economy may be providing an easier to services, it’s affecting the current business model and it brings up the question to what extent can the sharing economy hold up to the demand.

FinTech has disrupted the financial services industry by bringing technological innovations to the well-established industry. While FinTech has created many technological innovations in the financial sector, Fintech has created new areas of fraud. FinTech such as crowd funding and peer-to-peer platforms have provided consumers with the ability to access new methods of investing and acquiring loans that do not have the same regulatory oversight as traditional methods. FinTech is creating new marketplaces for financial transactions to take place. The marketplaces that are being created through FinTech are experiencing high risks of fraud due to the lack of regulatory oversight on the rapidly evolving industry.

In order to combat the increased fraud risk as a result of FinTech, the RegTech industry has started to develop with FinTech. RegTech describes technologies that increase the efficiency of operations by providing legal and regulatory compliance. Some examples of RegTech used to combat fraud are biometrics and tokenization of transactions. With the creation of new marketplaces and faster payments, it is critical to continue to adopt regulations to FinTech in order to prevent serious financial fraud from occurring.

Reference:
https://www.taylorwessing.com/download/article-fraud-in-fintech.html

There are a few ways that Fintech has been able to disrupt the trading market and open up new possibilities in online trading. No-free trading is one way that has become increasingly popular. Fintech companies such as Robinhood have found way to garner large MAUs and offer trading without charging a fee. Speaking from experience, the app is easy to use and seems seamless, and has a large following especially with the youth of society. Binary options are also being offered by fintech firms, and are fin derivatives that allow you to bet on an asset with a specified time horizon. There is also no unlimited risk so it has become a popular option for day traders. Another way the industry has changed is the concept of social trading. This entails following strong traders on social media and using their strategies and trading in a similar way. This includes preset platforms in order to ease the trading process and make it easier to replicate these strategies.

3 Ways Financial Technology Has Disrupted Online Trading

This article talks about the recent rise and potential of FinTech in Mexico. The writer gives some factors as to why FinTech has taken off, why it could continue to rise, and some potential obstacles.

I found this article to be fairly interesting, and told me a lot of things that I didn’t know where happening in Mexico. For example, I was not aware just how much the Mexican government had invested in technology and infrastructure. I was also not aware that Mexico had been able to attract so many entrepreneurs who have Silicon Valley experience. Based on the article, it seems like the main factor for the rush of FinTech investment in Mexico is the combination  untapped number of potential customers. In places like the U.S., new FinTech companies have a lot of competition from existing FinTech and traditional financial companies. In Mexico, it seems that the market hasn’t been saturated yet, so it makes sense that investors would be so willing to try to move into the market. In addition, it makes sense that many investors would try to use Mexico as a test market for the rest of Latin America.

 

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The rise and rise of Mexican fintech

 

The growing market for financial technologies is greatly improving efficiencies for institutions.  Mark Carney, governor of the Bank of England and chair of the Financial Stability Board, notes that new entrants such as peer-to-peer lenders, payment service providers, and innovative trading platforms are bringing  new technologies to reinforce economies of scale.  Carney discusses the risks that come with new underwriting models causing a change to credit quality and macroeconomic dynamics.  Fintech is able to capture new types of data.  For example, as customers rely more and more on machines, they are able to gain the best rates possible.  The new technologies are used to improve credit underwriting, create better matches between products and customers, and grow peer-to-peer lending.  Of course with the increase in technology comes an increase in privacy issues and the handling of customer information.

https://www.cryptocoinsnews.com/bank-of-england-governor-fintech-brings-great-promise-and-risks/

 

 

Cryptocurrencies have come a long way since the first use of 10,000 Bitcoins to buy 2 pizzas in 2010. According to coinmarketcap.com, there are 7 different cryptocurrencies with a market cap of over $100 million, though none come close to Bitcoin with a market cap of nearly $15 billion. With companies like Microsoft now accepting Bitcoins as payments, the future of cryptocurrency is important to pay attention to. Kathleen Breltman, COO of a new blockchain platform called Tezos, offers her five predictions for cryptocurrency in 2017. Here I will touch upon a few and offer my own views.

“Investment funds will look to invest in cryptocurrencies”

It is important to understand that cryptocurrencies are still currencies, subject to wildly fluctuating economic forces. Though Bitcoin’s value is rising right now, its value fell significantly after its last peak in 2013. That said, some cryptocurrencies may be more stable than some real currency.

“Exchanges will become a source of scrutiny”

If cryptocurrencies want to be legitimized, then governments must be involved for the sake of regulating and protecting consumers – assuming governments can keep up with rapidly evolving technology.

My brother often says he regrets not investing in Bitcoin earlier. Of course, hindsight is 20/20.

Source: https://techcrunch.com/2017/01/23/whats-next-for-blockchain-and-cryptocurrency/

https://coinmarketcap.com/

 

Cleo, a London-based startup, has developed a chatbot that helps people manage their finances. The company has recently received funding from a number of angel investors, including Skype founder Niklas Zennstrom. Zennstrom has invested his personal assets instead of going through the VC firm he founded, Atomico.

Cleo can be accessed either through the Cleo app or Facebook Messenger, and through integration with Google Home and Amazon’s Alexa. This AI-powered financial assistant allows you to ask it about your current bank account balance, how much you’ve spent at what store, and set budget or spending reminders. CEO Barney Hussey-Yeo wants to make “managing your money incredibly simple” and says that typical users are young professionals and graduates. He also notes that the “manage your money” space is increasingly competitive. With companies racing to become the financial interface of this generation, Cleo has managed to make money management mobile, which I feel has a lot of potential for the millennial generation. The concept seems very convenient and easy to use, however, I would be concerned about the security of the application handling banking information.

Skype’s Niklas Zennström backs London fintech startup Cleo

This article discusses the new wave of robo investor applications and how millennials are flocking to these environments in record numbers. Robo investors are able to give millennials an investing service much cheaper than the traditional financial advising system. Fintech has enabled these companies to create a low cost solution that does not require the large marketing costs that come with many of the traditional players. Millennials are using more of these applications because they are able to trust the technology behind it. There is a need for this area of fintech from Millennials as this generation has one of the highest savings rate of two thirds of the group putting more than 5% of their paychecks into savings. Millennials enjoy putting their savings into a service that will automatically invest, re-balance, and adjust their capital.
Many of my friends are avid users of these types of services that have a very intuitive user face and make setting up the service friction-less. I believe much of my generation will likely shy away from the mutual fund or high fee route in favor for a more ETF and index approach which is widely used by the fintech applications.

http://www.forbes.com/sites/hbsworkingknowledge/2016/12/07/why-millennials-flock-to-fintech-for-personal-investing/2/#727a16524f47