Due to technological advancements, today anyone with a smartphone and internet access can purchase and sell stocks online while relaxing in their own homes. Stock investing has become a more democratic, decentralized commodity for all. Financial institutions use artificial intelligence and machine learning to facilitate transactions. Hence, the adoption of technology is a prerequisite to succeed in the stock trading industry.
Let us get into the origin of the stock market and evaluate how technology has shaped the stock market over time and what the future holds for financial platforms.
Origin of the Stock Market
The Dutch East India Corporation, the first publicly listed company, founded the first modern stock exchange in Amsterdam. The business decided to sell stocks and give shareholders dividends to obtain funds. Shares of the Dutch East India Company were the only securities traded on the exchange for a long time.
By this time, new businesses were founded in other nations, and stock purchases were extremely popular among investors. Most investors were enthralled to invest in available startups without researching the company first. Due to the resulting financial instability, investors eventually tried to sell all of their shares quickly in 1720 out of panic. But nobody was buying, and the market fell.
The South Sea Bubble was the next financial crisis that occurred in England shortly after. Investors grew accustomed to the concept of trading stocks, although the thought of a market crash worried them.
How Has Technology Helped the Trading Platforms?
In the context of the stock market, artificial intelligence has changed the game. Leading businesses are combining quantitative trading, big data processing, and machine learning technologies to offer real-time market analyses. Automated robots evaluate tons of data to execute trades at low cost and with minimal risk. Technology has provided the following facilities to the stock market:
● Availability of Online Trading Platforms
Online trading platforms have fundamentally revolutionized users’ trading experience. The days of using brokers and worrying about financial losses, paperwork, and other issues are long gone. The trading process is now seamless due to the advent of trading platforms.
Overall, online trading platforms make this a more profitable service by lowering the cost and time of trading. The trading experience is hassle-free as technology has eliminated the need for a middleman.
● Fast and Secure Transactions
Initially, due to intermediaries, stock market participants had to go through a laborious and time-consuming process to regulate any transaction. Now, the stock market enables faster and more secure transactions thanks to recent technical improvements. Additional financial problems, including manual records, audits, and verification, are eliminated due to fewer system intermediates.
● Access to Real-time Monitoring
The trading experience and profit have greatly increased through real-time monitoring. The most recent technological developments enable brokers and investors to obtain precise and reliable quotes.
It has also eliminated the possibility of trading blunders caused by humans. The ability to research stock performance and select the best investment strategy has immensely improved. Now, investors can get stock information quickly. Fast information availability is associated with more rapid market change than ever. All of this has reduced the stress and increased the viability of trading.
● Trickle-Down Effect on Wealth Distribution
Technological developments have decreased inefficiencies and helped in lowering costs and entry barriers. Additionally, it helps in accelerating the procedure of online trading and investment. People who previously could not participate in the stock market due to increased prices can now open an online demat account and start trading. There was an increased awareness about the difference between demat and trading account.
What is the Future Ahead For Trading Platforms?
The gradual adoption of modern technologies has greatly enhanced the user experience and, consequently, retail stock market participation. AI-equipped digital trading systems enable retail investors to conduct research, investigate, comprehend, and make wise investment selections.
More trading platforms are implementing AI to help consumers execute deals at the best price. New-age investors’ retail participation is continuously increasing due to several factors, including technological improvements and the integration of trading platforms and APIs (application programming interfaces).
The world has changed significantly as a result of innovations. Technology has improved the feasibility, security, and effectiveness of the stock market for traders and investors. Without technology, the stock market will suffer significant losses. Technology has become an integrated part of the stock market.