Algorithmic Trading and the Financial Sector

Leveraging the Power of Algorithmic Trading in Finance

Financial technology, also known as Fintech, is a conglomeration of finance and technology that is rapidly evolving and transforming the way we think about and use financial services. From crypto currency and digital banking, and even to more traditional methods of banking, there are many new and exciting technologies that are poised to change the future of finance.In this article, we are going to explore some of the most exciting emerging technologies on the horizon.

Though still in its infancy, one of the most exciting areas of emerging tech in the fintech space is algorithmic trading. Coupled with systematic codes, this budding technology is being used to improve financial services and make them not only more efficient but more secure as well. For example, algorithmic trading bots can be used in trading by analyzing large amounts of financial data and identifying underlying trends. Able to hold and analyze more data than an average person, the sophisticated algorithmic trading bots used in this manner can both potentially improve risk assessment and enable a greater degree of fraud detection, and can be used to trade on an investor’s behalf, with minimal involvement from the investor. In real world testing, this technology often outperforms real human traders by wide margins — though it is important to remember that this technology is still new, and shouldn’t be relied on exclusively for trading or investing purposes. So-called algorithmic trading bots are increasingly being developed to work on behalf of banking institutions and individual traders alike.

0 Percent is working actively in this space and has already developed several algorithmic trading bots! Take a look at our algorithmic trading bots in action:

Algorithmic trading technology is also being integrated in a host of other applications, such as financial risk management, portfolio management, and fraud detection.

Another exciting emerging technology within the fintech space is cryptocurrency. Crypto, such as Bitcoin and Ethereum, is a virtual, or digital currency that uses blockchain technology to record and verify transactions. While crypto isn’t exactly emerging — it’s been around for quite a while — its widespread adoption by individuals, investors and businesses is still growing. Crypto offers a wide range of benefits, including low transaction fees that are fast and efficient, and increased privacy and security. As more businesses and individuals begin to adopt crypto, it has the potential to become a currency that is equivalent to traditional fiat currencies. Many countries, for example El Salvador, are already hopping on the crypto bandwagon and allowing certain cryptocurrencies to be used as currency.

However, crypto is a digital asset, and must be generated or “mined” into existence. Artificial intelligence is being utilized in the crypto mining space at an ever increasing rate and can potentially make that energy intensive and time consuming process more streamlined through a multitude of ways. First, by scaling up the efficiency of the computing power, AI can scale down the energy consumption of the hardware. In case you don’t know: crypto mining is an extremely energy intensive process. AI can also be used to optimize the hash rate, which is a measure of the processing power of a crypto mining rig, potentially increasing the rate at which new units of crypto are released.

By using fintech in these ways — and there are certainly many other ways fintech can be utilized — crypto mining operations can potentially improve their efficiency, reduce costs, and increase their profits.

New technological developments are also having a significant impact on digital banking. Digital banking is the use of technology, such as mobile apps and online platforms, to access financial services. Most banks these days operate digitally, or at least offer that option to their clients. Digital banking allows users to perform all the traditional banking operations such as transferring money, paying bills, and generally managing their accounts, without the need to visit a physical bank branch. Digital banking offers increased convenience and accessibility, and has the potential to revolutionize the way people manage their finances.

Some ways that AI can be used in fintech and digital banking are:

  • Fraud detection: Digital banking algorithms can analyze patterns in data to detect fraudulent activity in real time, helping banks prevent financial losses
  • Loan underwriting: This technology can help banks process loan applications more efficiently by better analyzing the credit of applicants & identifying the best lending options on a client-by-client basis
  • Personalized financial advice: As fintech continues to evolve, it may become more adept at providing financial advice, helping banks manage investment portfolios, and offering advice to customers based on their individual needs & goals
  • Investment management: Algorithmic trading bots can help banks potentially manage investment portfolios more effectively by conducting analyses of market data & identifying profitable trade opportunities.

Overall, the use of new innovative technologies in digital banking may change the game forever, benefitting both institutions and everyday traders. While there are many exciting ways that fintech is catalyzing the growth of the financial sphere, there are also challenges that need to be addressed along the way. For example, regulatory uncertainty — governments and regulatory bodies struggle to keep up with the rapid pace of technological change. Additionally, there are concerns about the security and privacy of financial data as well as the potential for new technologies to be used for nefarious purposes.

The fintech space is home to a number of exciting and emerging technologies that have the potential to transform the way we interact with finance and financial institutions. From investing to crypto mining, and to digital banking and beyond, these technologies offer a wide host of benefits and opportunities, making this space an exciting area of development to watch!

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About the Author

Jeff Sekinger

Jeff Sekinger Founder & CEO, 0 Percent Who is Jeff Sekinger? Visionary Trailblazer Sekinger has been in the financial industry for over a decade. Starting

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