technology investing Archives - The Free Financial Advisor

Big tech wants a bite of the financial services pie. I think technology and finance go hand in hand, but I also think it’s mostly a one-way street, in terms of benefits. Technology has definitely given the financial services industry an upgrade, but the finance industry tends to think of big tech as a threat. Why is that? Today, we’ll take a look at big tech, how they’re changing financial services, and if those big banks actually have something to worry about.

What do you mean by “Big Tech”?

The names you know off the top of your head. Apple and Google to name two, but there are other players that don’t get as much publicity. Cloud storage from Amazon and/or Microsoft. Software companies like Oracle. Chipmakers like Nvidia. Data companies like IBM. There are a lot of moving parts and it’s no surprise, everything uses technology. What’s different about financial services is the regulation, so adoption of new technologies is typically slower.

How tech changed finances

From a consumer standpoint, banking is easy. Checks are deposited directly into your bank account. You use your bank’s app to review expenses and deposit any real checks you may have. Practically all bills are able to be paid electronically. Not to mention you can automate bill payments and transfers. Also, if you want to save for retirement or invest some money, there are several companies that can do it all online (though we always advise you to speak with a person for advice).

Big tech in finance moving forward

Big tech is already offering some financial products. Google has Google Pay, Samsung has Samsung Pay, and Apple has Apple pay. Apple is also working on a Buy Now, Pay Later (BNPL) offering, but nothing is out yet.

Big tech will be able to compete with legacy financial services companies because they have a competitive advantage. They don’t have the regulatory oversight that current companies do and they have a customer base (and their data) that they can leverage with new offerings.

Parting thoughts

Do I think several big tech companies will come out with financial services offerings? No. I think there will be a select few that come out with some, but I don’t think it’ll be the scale of Wall Street, for example. I think it would behoove big tech and other large companies to remember that being a conglomerate doesn’t work right now. Just this year, there were several companies that split their business up, based on industry (like GE). Could the conglomerate model come back around? Absolutely, but I don’t think now is the time.

Related reading:

Technological Investment Opportunities

Why Financial Literacy is Important

Disclaimer:

**Securities offered through Securities America, Inc., Member FINRA/SIPC. Advisory services offered through Securities America Advisors, Inc. Securities America and its representatives do not provide tax or legal advice; therefore, it is important to coordinate with your tax or legal advisor regarding your specific situation. Please see the website for full disclosures: www.crgfinancialservices.com

Jacob Sensiba

Jacob Sensible is a financial advisor with decades of experience in the financial planning industry. His journey into finance began out of necessity, stepping up to support his grandfather during a health crisis. This period not only grounded him in the essentials of stock analysis, investment strategies, and the critical roles of insurance and trusts in asset preservation but also instilled a comprehensive understanding of financial markets and wealth management. Jacob can be reached at: jake.sensiba@mygfpartner.com.

mygfpartner.com/jacob-sensiba-wisconsin-financial-advisor/

Throughout history, some of the best companies are ones that created a product or service that solved a problem. I believe the vast majority of successful companies in the future are going to be technological or innovative in nature. In the coming years, there will be incredible technological investment opportunities. Here are some areas I think we should watch.

Space

When billionaires start spending billions of dollars, it’s hard to ignore. Especially, when all eyes seem to be on them when they’re making these gigantic moves. When it comes to colonizing Mars, space tourism, and all of that, it’s hard to see, at least right now, a company being able to profit on this segment. Eventually, we’ll be advanced enough that it’ll happen, but I don’t know how far away that is.

When it comes to sending satellites to orbit and payloads to the International Space Station (ISS), profitability seems more likely and much sooner.

Medical equipment/Pharmaceuticals

These are separate sectors, but I’m lumping them together for the sake of organization. I do this because they are both going after the same goal, making the human population healthier. They are doing this by helping cure diseases and making it more efficient and effective to maintain health.

There are plenty of diseases that need cures and a lot of self-sabotaging behaviors that humans need help with. It’d be silly to think that this area won’t be innovative and an incredible technological investment opportunity.

Renewable energy/Nuclear fusion/Clean up carbon emissions/environment

I’m not going to lie, with regard to the areas/sectors in this article, this section is my favorite. With all of the reports, publications, politicians, and scientists sounding the alarm bell about climate change, it’s impossible to ignore the technological investment opportunities coming down the pike.

Fintech

I’ll be perfectly honest, I’m not 100% sure what kind of advancements will come out in the financial technology space that hasn’t come out already. Perhaps what will end up happening is more efficient iterations of the processes, programs, and products we have right now.

Robotics/AI

Right after the renewable energy section of this post, in terms of my favorite, is this one because it has the ability to have an impact on everything.

Here’s the challenging part, at least challenging in terms of investability. There are going to be a lot of companies that invest in AI and machine learning. The biggest spenders and investors of AI technology are large technology companies that exist already.

Apple, Amazon, Google, Microsoft, and the like are already changing the game for AI. Finding a smaller company whose sole product/service is AI is going to be tough, but that doesn’t mean it’s impossible.

There are a lot of cutting-edge, technological investment opportunities that will present themselves in the future. Make sure you’re paying attention and take advantage of those opportunities.

Disclaimer:

**Securities offered through Securities America, Inc., Member FINRA/SIPC. Advisory services offered through Securities America Advisors, Inc. Securities America and its representatives do not provide tax or legal advice; therefore, it is important to coordinate with your tax or legal advisor regarding your specific situation. Please see the website for full disclosures: www.crgfinancialservices.com