2017 has descended upon us and early birds are already scouting for the next big thing. Investors are searching for opportunities and journalists are hunting for stories. Keeping merits and demerits of demonetization apart, 2016 can be seen as a watershed year. As demonetization took us by surprise during the second last month of 2016, large parts of India started adopting digital modes of payment in a big way. It forced many Indians who never even had a simple savings account to start using debit cards.
This also created huge ripples in the fintech sector. Apart from the usual suspects such as digital wallets and payment gateways getting a huge fillip almost overnight, other areas that were galloping along suddenly seemed poised to achieve a hockey stick growth.
Let us look at some of these upcoming trends which can both be impacted as well as create impact in 2017:
Did you know that there are39robo advisory firms in India? Although none of these companies have a robot managing your financial portfolio, the process of offering financial advice is getting automated. Larger financial groups will also be getting into this sector. For instance, read about my review of Edelweiss’s GPS platform. By posing pertinent questions, it makes the entire experience of investing easy and straightforward for a lay investor.
Bitcoin and Blockchain:
Bitcoinis a new type of digital currency as well as a payment system. As of today, 1 bitcoin equals Rs 69,349.42 Yes, you read that right! Bitcoins have been around for almost 8 years now. I remember a friend who had mined 10 bitcoins in2011when it was worth Dollar 1. (Around Rs 57). Since then it has only grown in value. Bitcoin is also a volatile currency. According toMark Thomas Williams, bitcoin is seven times more volatile than gold and eighteen times more volatile than the US dollar.
Blockchain is nothing but a public ledger of all the boticoin transactions that have been executed. When demonetization was annnounced it had a hugeimpacton fledgling bitcoin startups in India.I sure hope my friend hasn’t sold off the entire lot! 🙂
Peer to Peer Lending:
Need a loan or an investment? Neither Banks nor NBFCs nor even your private money lender lending you any money? Shy to ask family or friends? P2P lending is the answer.
P2P lending connects individuals who are interested in lending directly to those who need the moolah. Presently this sector is highly risky and unregulated. Interestingly RBI released awhitepaperon this nascent industry and proposed to categorize P2P platforms as a type of NBFCs. There are around 30 P2P platforms in the country includingLendbox,Lendenclub,Faircentandi2iFunding.
Accuracy, Speed, Reduction in costs and Elimination of ‘Emotions’ are the four advantages of Algorithmic trading. Several traders get highly emotional during trading hours and then rue their decisions. In the US,90%of trading takes place through algorithms. In India, this number is 2%.
Lack of clarity and consensus amongst market participants including regulators about what exactly can be classified as algorithmic trading is the biggest roadblock.