Digital Investment Tools And Their Advantages
Since the last quarter of the 20th century, rapid changes in technology, especially developments in communication and information technologies, have changed the ways of doing business and have also brought about new business models. One of the areas affected by developments in communication and information technologies is the finance sector and the capital market.
In the finance sector, especially banks use technology intensively, and the best example of this is Internet banking applications. In the capital market, there have been radical changes in stock exchange-online investment platform relations and online investment platform-customer relations, and most capital market transactions have started to be made over the internet.
Today, investors can buy and sell stocks or other securities from stock exchanges in any corner of the world from their computers at home. Investors can create and manage their portfolios through digital investment tools that provide real-time data and analytics.
For this reason, the need for online investment platforms and brokers is gradually decreasing. In the capital market, where globalization is intense, there is now a move towards a single stock exchange in the world.
What Is Digital Investment And How Is It Done?
Digital investment, in its broadest sense, is investing in capital market instruments using electronic communication tools such as the Internet, telephone, and ATM. In its simplest sense and the sense used in this study, online investment is the execution of capital market transactions over the Internet.
An online investor is a person who conducts capital market transactions directly and on his own over the Internet. An offline investor, on the other hand, is a type of investor who conducts investment transactions using traditional methods, in other words, who places his orders directly from an online investment platform or by phone. It is stated that online investors are more inexperienced and younger than traditional or offline investors.
While some investors prefer online investment due to convenience and cost advantage, some like to have a person in front of them, while the share of online transactions is rapidly increasing, the advantages and disadvantages of online transactions need to be revealed and explained to investors.
The advantages of online transactions are as follows:
– Provides cost savings. This may vary depending on the transaction costs and minimum account balance of the selected online investment platform. For example, with the start of transactions over the Internet in the US, commission rates have dropped from $30 to $5-6.
– It saves time. In addition to the cost advantage, online transactions also have other advantages. The investor can access his account at any time, learn whether the orders he gave were executed or not, and the status of his account balance 24 hours a day.
– The investor can place an order at any time of the day. The investor can place an order at midnight and sleep comfortably knowing that it will be automatically processed in the morning.
– Investors can benefit from online research reports and data. Many online investment platforms publish their research and reports on their websites. Investors can make use of these and place the right order. Apart from online investment platforms, national
What Are Robo-Advisors And How Do You Use Them?
Robo-advisors (robo-advice systems) are automated software solutions for managing customers’ assets and investments. Using algorithms, the data-based systems create an individual investment strategy, implement it automatically, and carry out transactions automatically based on personal presets.
There are now numerous products on the market in the area of automated financial portfolio management that differ in terms of the algorithms used, investment strategies, and costs and fees. Since the processes are automated and investments are usually only made in passive index funds (ETFs), the costs and fees are significantly lower than with conventional investment advice.
The second major advantage of a robo-advisor is the technology behind it, which relieves users of many work steps and uses large amounts of data to reduce the risk of errors and misjudgments. Furthermore, robo-advice applications are usually characterized by an intuitive user interface, which makes them easier to use.
The most important advantages of digital asset management at a glance:
- Time and effort savings through automation
- Lower investment costs
- Transparency regarding costs and fees (from reputable providers)
- Comprehensible presentation of the investment strategy (from reputable providers)
What Are Online Investment Platforms And How To Trade On Them?
The effectiveness of an online investment platform that provides online transaction services depends on many features such as fast management of orders, easy purchase and sale transactions, and the ability to control the portfolio at any time.
Many online investment platforms’ features such as low commissions, research reports, and fast transportation affect investors. These features are not offered on all online investment platforms. Therefore, choosing the right and suitable online investment platform is important.
The criteria to be considered when choosing an online investment platform are as follows:
When choosing an online investment platform, first of all, attention should be paid to commission rates. Online investment platforms with low commission rates or amounts should be preferred. In our country, the commission rates of online investment platforms are generally the same.
Not all online investment platforms offer real-time prices to investors. While some online investment platforms charge additional fees for these services, some online investment platforms do not charge any fees. In addition to basic commissions and fees, brokerage firms may charge fees for various services.
How To Use Digital Wallets And Payment Systems Securely?
The increasing prevalence of e-commerce and the development of technological infrastructure have made it necessary to develop electronic payment systems. The development of electronic payment methods allows for the reduction of costs and the acceleration of commercial activities.
Among the electronic payment systems developing in different areas such as credit cards, virtual credit cards, electronic fund transfers, electronic money, smart cards, digital wallets, and contactless payments, digital wallets stand out due to their convenience, flexibility, and security infrastructure they provide.
Digital wallets are defined as applications that allow a person to store their electronic money and credit card information and perform e-commerce transactions. Digital wallets, which enable payments to be made faster and more economically than the traditional banking system, allow the use of electronic money and cryptocurrencies, which are thought to replace cash today and in the future.
In the developing digital wallet market in the world, the fact that leading companies such as Alipay, Amazon Pay, Apple Pay, Google Pay, PayPal, and Samsung Pay offer digital wallet applications has rapidly increased the use of digital wallets.
It is estimated that payments made with digital wallets in East Asia and China will reach $5.7 trillion in 2025 and $708 billion in Europe, and it is emphasized in various studies that the COVID-19 pandemic has increased digital wallet use and mobile payments.
It is possible to divide digital wallets, whose main activity is payment services, into two according to their areas of use. First, digital wallets, which offer prepaid shopping opportunities to consumers in all stores they have agreements with and facilitate spending the balances that customers load into their digital wallets in the physical and virtual world, provide consumers with a wide range of use and convenience.
Examples of such widely used digital wallets are Apple Pay, BKM Express, Alternative SuperApp, Paypal, and Ininal. The second type of digital wallet only provides services to its members in shopping, returns, and payment processes within the stores they are located.
The main purpose of the investments made by e-marketplaces in the field of payment services is to reduce transaction costs, speed up payment and refund processes, provide flexibility, convenience, and secure payment services, as well as offer electronic money that can be used in e-marketplaces as reward money with various campaigns in order to increase the loyalty of customers to the marketplaces. Consumers who want to benefit from these campaigns and opportunities.
What Is Digital Asset Management And How Is It Done?
According to many investors who trade online or are interested in this subject, secure digital asset management is the most important issue in online banking. The fear of individual investors and especially beginners is situations such as the transaction being interrupted, an outsider intervening in the transaction or not being allowed to complete the transaction.
While online brokerage firms do not provide full guarantees regarding security, they continue to work to increase the reliability of their systems. Many investors fear that password crackers will break the system and see the transactions they have made.
Brokerage firms cannot guarantee that this will not happen. However, they say that such attacks can also occur in traditional brokerage firms.
In other words, all data transmitted between the user and the web service server is encrypted. In this way, third parties cannot learn the content of the transmitted data.
In SSL, the web service server proves that it is indeed the site in question with the electronic site identity document it receives from an approval institution. In this way, the user knows that he/she is connected to the site he/she wants and is sure that the data in between is transmitted securely.
SSL uses separate keys for encryption, identity information, and data integrity. This requires the use of long keys for identification and data integrity. The use of long keys is an application that is also mandatory by the states for security. The longer the key length, the more difficult it is to decipher the password.
See you in the next post,
Anil UZUN