4 Financial Trends we can look forward to in 2017

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:

Robo Advisory: 

Did you know that there are 39 robo 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:

Bitcoin is 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 in 2011 when it was worth Dollar 1. (Around Rs 57). Since then it has only grown in value.  Bitcoin is also a volatile currency. According to Mark 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 huge impact on 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 a whitepaper on this nascent industry and proposed to categorize P2P platforms as a type of NBFCs. There are around 30 P2P platforms in the country including Lendbox, Lendenclub, Faircent and i2iFunding.

Electronic/Algorithmic Trading:

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.

So what are you betting your money on?

Edelweiss GPS – Giving direction to your investment strategy

Wolfgang Amadeus Mozart is supposed to have remarked – ‘True genius lies in simplicity’.

Since I started investing a little more than half a decade ago, I have used different websites to invest, track and manage my portfolio. Navigating through these portals used to be a difficult experience. Especially since I didn’t know how to begin or what should be my purpose to invest. Should I be starting off with stocks or settle down with mutual funds?  As a wet behind the ears investor it used to be difficult for me to understand several terms.

However Edelweiss has to adhered to Mozart’s philosophy and have introduced Guided Portfolios (GPS) whose user interface makes investing unbelievably easy.

So what is Edelweiss GPS?

Edelweiss GPS is an algorithm based intelligent system which designs mutual fund portfolios for investors and guides them towards their financial goals through systematic investments. Confused? Don’t be! Keep reading.

What was the need for such a product?

Simply, to make things simple! Investing has historically been a high involvement process. Either you need to make sense of several research reports with numbers thrown about generously or be dependent on tips with doubtful fundamentals. What if something could address both these problems? That is what this platform does. It offers an informed recommendation after posing straightforward questions about your background and goals.

How does it work?

It works by making the process of investing easy. Click on Edelweiss.in. You will encounter pointed questions such as: I have some money and want to invest it OR I have a financial target and want to achieve it

If you fill up the blanks and choose the risk profile which suits you amongst low, medium and high.

Once you click on show me my portfolio, you would encounter the recommendations made by the product as well as how this portfolio has perfomed in the past:

The platform also offers the rationale for recommending this portfolio, performs a scenario analysis by comparing it with performance offered by regular fixed deposit and also predicts how the portfolio might shape up into after certain number of years.

The Indian markets are poised to achieve a multi year bull run and you might be worried about missing out. If that is the case, then sign up quickly with Edelweiss GPS and you would be fascinated by how it makes the entire experience of investing a breeze.