How Can Fintech Impact the Traditional Investment Landscape?

Financial advice can be a sensitive topic – those giving it don’t want to mislead customers, while customers are wary about the level of trust they can place in their advisers. Nonetheless, done correctly, investing can be a very beneficial way for someone to use their funds. This November we are exploring all the aspects of wealthtech and how the industry has developed this year.

For the inexperienced, the word investment could be very easily associated with something like Wall Street. Traditionally, those working in areas like Wall Street have invested in bonds, stocks, mutual funds, and more, but times are changing. Now, it is much simpler for the average Joe to enter the world of investment due to fintech. Not only that, customers have huge arrays of investments to choose from – both traditional and alternative. So what impact has fintech had on the landscape?

Capitalising on legacy tech

Raj Bakhru, CEO and co-founder of BlueFlame AI

Raj Bakhru, CEO and co-founder of BlueFlame AI, the AI platform for alternative investment managers notes how incumbents’ reliance on legacy tech and human resources has been costly as fintechs utilise AI and newer tech to speed up cumbersome processes.

“Traditional investment platforms have captured a large portion of global revenue and fintech has only scratched the surface. The main challenge in legacy platforms is the reliance on human resources, resulting in low margins and challenging deployments.

“While incumbents will also benefit from tech advancements, there is a historic opportunity for fintech providers to capture market share due to the lack of legacy business models and innovative pricing and packaging.

“Look for AI startups to widen the access to all asset classes. They can attack areas with GenAI that were previously too expensive or cumbersome to attempt. A great example of this is knowledge management and access.

“Firms have built processes, relied on legacy systems, and third parties to store their knowledge with gaps in alignment. We’re looking at decades of information. GenAI when integrated into a firms tech infrastructure can bring this together this data to make it more accessible, drive more informed insights, and enable firms to leverage all their knowledge in one place.”

Private markets work at the same pace as public markets

Myles Milston, co-founder and CEO of Globacap

Automation and digitisation have had a huge impact on the speed of private markets explains Myles Milston, co-founder and CEO of Globacap, the private market investing platform:“Private markets have traditionally fallen behind public markets when it comes to efficiency. However, new technology, like workflow automation software, has brought digitisation and automation to private markets.

“Private assets, from shares in private companies to units in private equity managers, can now be transacted and settled almost as efficiently and seamlessly as public markets. This significantly reduces the settlement cycle, lowering risk, and allowing a greater number of participants to allocate to private markets in the first place.

“The digitisation of cumbersome processes such as securities issuance, administration, transferability, and settlement has streamlined transactions, leading to a reduction in costs, efficiency gains and improved access.

“In essence, through automation and digitisation, fintech is bringing public markets efficiency to private markets and this progress is making it a formidable force.”

Welcome to the digital world

While automation has significantly accelerated the traditional investment sector, another way it has been taken to the next level is through tokenisation.

Javier Rodriguez-Alarcon, CCO at XBTO, the cryptocurrency finance firm says: “The tokenisation of real-world assets, such as bonds, real estate or commodities, into digital tokens on a blockchain, is one of the key ways fintech is impacting the traditional investment landscape. Industry projections estimate that the tokenised real-world asset market could expand to between $2trillion and $30trillion by the decade’s end. This is because of the significant benefits of tokenisation to the traditional investment landscape.

“The first benefit is cost – tokenisation streamlines the issuance, operations, and administration of assets and debt, reducing costs and enhancing efficiency. Tokenisation also supports innovation, as it enables highly customisable investment structures, tailored to specific issuer and investor needs, and supports an efficient secondary market. Lastly, the growth of tokenisation means greater availability of assets to investors, enabling improved diversification opportunities.”

Meeting digital demands

Satayan Mahajan, CEO, Datalign Advisory

For Satayan Mahajan, CEO, Datalign Advisory, an AI-enhanced platform that matches consumers with leading financial advisors, the future of the investment market is fintech.

“Over the next decades, $80trillion is expected to pass from Baby Boomers to younger generations, representing the greatest wealth transfer in history. Women, who already control one-third of household assets, are emerging as a financial powerhouse, poised to inherit over a third of this Great Wealth Transfer ($30trillion) by 2030.

“At the same time, Millennial and Gen Z investors have different preferences when it comes to seeking financial advice. Referrals used to be the number one lead-generation tool for Registered Investment Advisors (RIAs).

“Today, over half (57 per cent) of investors under 44 years old hired their advisor based on digital marketing efforts, according to Ficomm. Traditional wealth advisors will need to start leveraging fintech tools to source leads and offer virtual services and online resources to meet the next wave of investors in the digital-first environment they prefer.”

Breaking down barriers with blockchain

Miguel Buffra, lead financial engineer, RACE

According to Miguel Buffra, lead financial engineer, RACE, the asset investors through blockchain, fintech can make investing more accessible. “Fintech is breaking down long-standing barriers in high-value investing, and it’s doing more than just adding convenience: it’s completely transforming how we access and manage assets.

“Take, for instance, owning a share of a skyscraper in New York or a renewable energy project in Europe: these investments were once limited by complex, costly structures and regional boundaries. With tokenisation, high-net-worth individuals and family offices now have a practical, streamlined way to diversify across high-value, global assets.

“The potential of blockchain here is unprecedented. Smart contracts allow investment operations, like compliance, governance, and payouts, to become as secure and efficient as they are in any traditional setup, but with much less friction. This technology gives investors the confidence to expand portfolios internationally while keeping costs in check.

“Fintech’s impact on the traditional investment landscape is profound. It’s creating a future where high-value investing is no longer tied down by outdated systems but is as flexible, efficient, and globally accessible as modern investors need it to be. Fintech is opening up new opportunities for sophisticated investors, making it easier to access assets across the globe that were once difficult to reach.”

Fostering greater financial inclusion

Harry Temkin, chief digital officer, DriveWealth

In a similar vein, Harry Temkin, chief digital officer, DriveWealth, the B2B fintech platform said: “Fintech is revolutionising the traditional investment landscape by seamlessly integrating financial services into everyday platforms, allowing consumers to access investing and financial services while shopping or interacting on social media. This embedded finance model democratises access, breaking down barriers for emerging and first-time investors, and fosters greater financial inclusion.

“The rise of digital wallets is further transforming how younger generations manage their finances, promoting a balance between spending and investing. These wallets, particularly ‘super wallets’ such as CashApp and Revolut, provide access to a wider universe of financial resources, empowering users to make more informed investment decisions.

“Younger generations have the opportunity to invest in fractional shares, or less than one whole share of a stock, enabling more individuals to diversify their portfolios without needing substantial capital to own shares of leading stocks. Fractional shares create a balance between spending and investing by allowing an individual to invest the remaining pennies rounded up from a debit card transaction.

“The price of a stock is no longer an inhibitor, as investors are able to purchase as little as $0.01 regardless of the stock price. Whether a new or seasoned investor, fractional share investing allows investors to participate in equities more seamlessly and more efficiently.”

New investors beware

Praising the value tech can bring, Paul Gabrail, founder and host of the financial Youtube show, Everything Money, also noted that investors must be cautious with the extra data they have access to. They must avoid the temptations of being rash.

“Fintech is rapidly changing the investment landscape, but it’s a double-edged sword. As an experienced investor and personal finance educator, I’ve seen how technology can either help or hurt investors, depending on how they use it.

“Let’s face it, emotions are the enemy of disciplined investing. Fear and greed can make people react impulsively, which often leads to buying high and selling low—classic mistakes. Fintech tools like advanced stock screeners, automated portfolio trackers, and real-time data analysis offer unprecedented access to detailed financials, making it easier than ever to evaluate a company’s true strength–its cash flow, profit margins, and long-term potential.

“But here’s the thing: too much activity, driven by emotion or constant access to data, often leads to lower returns. It’s easy to get caught up in the hype, making trades based on short-term market noise rather than long-term value. Many people struggle with the flood of information fintech provides, and instead of helping, it can push them to make impulsive decisions.

“That’s why it’s crucial to use fintech wisely. Remember, investing isn’t about reacting to headlines or short-term market swings, it’s about understanding the value of what you’re buying. Fintech simply makes that process more efficient and accessible, allowing investors to stay grounded in the data and avoid costly emotional pitfalls. Stick to a disciplined strategy, and fintech can be a powerful ally in building long-term wealth.”

The post How Can Fintech Impact the Traditional Investment Landscape? appeared first on The Fintech Times.

Read More

Leave a Reply

Your email address will not be published. Required fields are marked *