Some experts have suggested that Covid-19 has provided opportunities for financial technology to open up investing to a wider range of investors. Michael Kent, Chairman of Azimo – a world leader in online and smartphone-based money transfers – was recently a guest on the FT Advisor Podcast to discuss how lockdown has accelerated change – More people than ever have been using the extra free time to get a better understanding of their finances.
Too often retail investors have been left out of share issuance, even though investing apps and websites have been around for several years. Younger and less affluent potential investors may also have been put off by complicated jargon and voluminous prospectuses. However, financial technology is helping to make the process of investing more democratic, and more retail investors are becoming interested in investing and are using their lockdown time and the technology available to get involved.
Michael Kent says, “The promise of fintech is a reduction in the cost to serve. Historically, people with access to market opportunities and good education were those who had a high net-worth but if you have £100 a month to spend it has been hard to put that into the market to get the same level of opportunities. So the wealth tech sector has an opportunity to reduce the cost of giving good investment service to more people, and younger people are used to organising their finances on apps, so this could be a way forward.”
Earlier in June, data from Experian found that since the start of the Coronavirus pandemic six in 10 Brits reported having increased financial awareness, 35 per cent had increased their knowledge of financial matters and 30 per cent had actively researched financial advice and guidance to help support themselves during this time. As financial education and fintech improves, even more retail investors will be able to participate in share issuance and feel more confident making investment decisions.
You can listen to Michael Kent on the full podcast episode here.
