How financial technology has disrupted the capital market landscape

Massive technological advances, including the increasingly widespread acceptance of the internet, are revolutionizing the capital market landscape.

Information flows are becoming seamless and borderless, instantaneous and almost costless. The swift changes that have happed so far and the anticipated changes ahead are increasingly offering opportunities for new value-added services, widening the competition base, and for new forms of competition. Technology has become a key driver of speed, informational advantage, efficient customer flow, and effective capital raising.

Technology is shaping the way capital markets are being operated and is making it easier for both capital markets intermediaries and investors to seamlessly interact.

Improvements in technology have enhanced the ability of firms, of all sizes, to directly access institutional markets, analyze large swaths of public trading data, and use analytics underpinned by predictive opportunities, often involving little or no risk to capital. Order handling has largely become automated. Mutual funds are using the
Internet to communicate with investors and to offer and distribute shares. Corporate issuers, large and small, are conducting offerings on the Internet.

While traditionally, investors needed to physically engage various market intermediaries such as stockbrokers; custodians and transfer secretaries to facilitate trading and
registration through the exchange of several physical documents, technology has now made it possible for the development of efficient electronic systems for the buying and selling of shares such as the one used by the C-TRADE platform. Investors are starting to bypass traditional exchanges and dealer-based trading systems, using electronic networks to deal directly with each other at a lower cost.

C-TRADE brings in a paperless and real time concept that enhances the registration and trading convenience.

C- TRADE has introduced investor interface tools such as a Web Portal, Mobile App and a USSD platform which are accessible to retail investors. The Web Portal offers an advanced interface which allows investors to participate on the exchange in real-time through personal computers and gives them rich stock market information.

Companies can now convey more information about themselves through technology and this has played a significant part in leveling the information playing field between individual investors and institutional investors.

Eventually, relatively instantaneous access to portions of management information systems will permit investors to analyze raw
financial information as soon as it becomes available – information currently being aggregated, at great cost, into quarterly and annual financial statements.

Improved telecommunications technology, combined with better analytics, search technology, and intelligent agent technology, will allow the market to learn better, absorb, and act on information, leading to more precise action in transacting of securities. Ultimately the perceived information risk of an investment will decline and, consequently, so will the corresponding cost of capital.

The C-TRADE platform ultimately allows investors to choose from two marketplaces; the Zimbabwe Stock Exchange and the Financial Securities Exchange with each market catering to the varying preferences of investors, whether immediacy of execution, or best price, or least market impact, or different type of trading system altogether.

Finally, technology continues to increase the globalisation of the capital markets.

The walls between competitors, built by geographic boundaries and time zones that once dictated and furthered nationalistic views toward commerce, will continue to fall because of better and lower-cost communications and analytics. Access to, and for, foreign capital markets and foreign users of capital through today’s technology has become increasingly simple.

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