The traditional investment market, as we know it, is going through profound transformations to reach and attract an investor public that is currently interested in security tokens!
Yes, we have barely matured the cryptocurrency market and we are already talking about tokens for investing in stocks, debentures, and other financial assets.
To understand the challenges of banks and brokerage houses, we need to understand what the traditional investment market is – a set of institutions and bodies such as the CVM that control the supply and regulate the conditions for investing.
It is an ecosystem that invests heavily in technology and seeks innovation to win over the 21st century customer. But it needs to overcome its own barriers to improve the relationship with the modern investor.
There are crucial issues that prevent their space from growing in the daily lives of customers who are connected to – and delighted with – disruptive technologies – and want to use them for everything!
What does this investment market need to overcome to attract this growing audience? Why is the traditional market lagging behind?
In this article, BLOCKBR shows some challenges facing the traditional investment market and how revolutions like tokenization are helping to drive positive change for everyone!
1 – LACK OF WILLINGNESS TO BE GLOBAL
In a hyper-connected world, where millions of people are currently working, having fun, or living in another country and want to put their money to work, how do you do it if the stock exchange or the bank is closed?
Even in the local day to day, the hustle and bustle makes people miss great investment opportunities because they can’t talk to the specialist or the institution’s system is too complex.
Tokenization with the blockchain brings full availability; you can buy tokens of a future crop or cryptocurrencies in the comfort (and silence) of home and all electronically, with lightweight applications and without waking up the manager.
It is a sign of the new times: the traditional investment market will need to bet on the total availability of systems if it wants to secure its client portfolio.
2 – YOU NEED TO INVEST AND COMPETE WITH NEW TECHNOLOGIES
Febraban estimates that the banking industry will invest nearly 26 billion in technology by 2020. This makes banks the second largest spending segment, especially on security of operations, something critical especially in Brazil.
However, on the way there is the revolution called blockchain, a way of offering and managing financial digital assets with numerous combined benefits:
- More availability (which we saw in the previous item)
- Democratization of access
- Higher Speed
- More security
- Higher efficiency
- Lower cost of operations
The road is long and challenging, because there are fintechs, which have the cutting edge of innovative thinking in their DNA and are always many hashes ahead!
3 – MUST ELIMINATE CENTRALIZATION AND BUREAUCRATIZATION
Many banks invest in technology to modernize their relationship with investors, but especially to win over young investors, who were born in technology and are averse to everything that, in traditional investments, refers to the analog world.
- Systems with too many screens and passwords;
- Phone contacts;
- Many rules and conditions;
- Centralization of control;
- Over-regulation.
Reducing bureaucracy, repetition of procedures, and excessive control are the biggest challenges of the traditional investment market – and these are not only demands from young people, but from today’s investors as a whole.
Digital banking brings a lighter relationship, where the investor has more autonomy.
On the other hand, tokenized blockchain technology amplifies, further decentralizing with the peer-to-peer relationship (directly between supply and demand computers) and reducing costs to offer more attractive investments.
4 – IT IS NECESSARY TO DEMOCRATIZE THE ACCESS TO INVESTMENTS
Investing is no longer just for large individual investors, companies and funds. Besides being public that do not grow in proportion to the sector’s spending, they are disputed by increasing competition, which forces strategic losses to maintain the portfolio.
People with small to medium investment potential want to invest and especially in something away from savings – which is not even an investment in practice.
But for this, it is necessary to democratize the offer – something that does not go well with too much bureaucracy, high investment floors, and complicated language.
Several tokenized assets such as real estate funds have the differential of fractionating the tokens of the offered product.
With this, the token values are significantly lower and the process:
- It attracts a larger audience of investors;
- It improves the liquidity of the supply as the audience increases;
- It boosts the results, because it is possible to make a better value;
- It generates a positive image for the offerer!
5 – IT IS NECESSARY TO PUT THE CLIENT AT THE CENTER OF THE RELATIONSHIP
Certainly banks will tell you that all their strategies place the customer as the center of their investments and relationships. We cannot dispute the intention, but the reality is far from the idea.
The reason is simple: the traditional investment market exists to offer products based on its own conveniences and risks, and in countries like Brazil it still meets a series of governmental requirements.
This is what we call the plastering of the investment market, which ends up treating investor satisfaction as a possibility and not a goal.
All the above challenges, combined and met, can take the investor experience to a higher level, increase attractiveness, and maintain customer loyalty.
But there is certainly (still) a long way to go!
6 – DISPUTE SPACE WITH THE POPULARIZATION OF DIGITAL ASSETS
It is a fact that in the last few years the digital asset is no longer a futuristic exercise, a fad, or something unaffordable; it is part of the routine of people all over the world as an efficient means of payment without costs and without intermediaries.
It all started with the monetary revolution caused by cryptocurrencies, which today are also a speculative investment product.
However, the technology that generates them – blockchain – together with smart contracts, has allowed an innovative way of offering investments and raising funds to emerge: tokenization.
Today it is possible to tokenize stocks, real estate, credit rights, and funds to works of art and allow digital assets to become popular across all socioeconomic classes.
With the high security of the networks, the low cost and the absence of intermediaries, the tokenization of investments will become more present in everyday life and will increase the challenges of the traditional investment market!
Do you know all the benefits of investing via tokens?
BLOCKBR Digital Assets is a fintech that combines technological innovation and digital knowledge to transform physical assets into digital ones, in the asset tokenization process.
The offer of tokenized physical and financial assets, both current and new, is democratic and decentralized, which makes investing safer, simpler and more efficient.
We enable, structure, issue and offer tokens on our platform and beyond. Be aware that tokens depend on feasibility and regulatory factors.
Do you want to tokenize your business or part of it? Do you have a business solution and does it make sense to issue your own token ?