Disruptive technology – A case of the capital markets

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C-TRADE

Technology has become a key driver of speed, informational advantage, efficient customer flow, and effective capital raising. It has disrupted the way capital markets have operated for a long time and is making it easier for both capital market intermediaries and investors to seamlessly interact.

Improvements in technology have enhanced the ability of firms of all sizes to analyse large swaths of public trading data, and use analytics underpinned by predictive opportunities, often involving little or no risk to capital. The increasing widespread acceptance of the internet, is revolutionising the capital market landscape even in African countries. Information flows are becoming seamless and borderless, instantaneous and almost costless. The swift changes so far and the still more rapid changes ahead offer opportunities for new value-added services, for the new competitors, and for new forms of competition.

While traditionally, investors needed to physically engage various market intermediaries such as stockbrokers; custodians and transfer secretaries for registration and to transact through the exchange of several physical documents technology has made it possible for the development of efficient electronic systems for the buying and selling of shares such as the one used by the C-TRADE platform. Investors are starting to bypass traditional exchanges and dealer-based trading systems, using electronic networks at a lower cost. C-TRADE brings in a paperless and instant real time registration and trading convenience. C- TRADE has introduced investor interface tools such as a Web Portal, mobile app and a USSD platform which is only accessible to retail investors. The Web Portal offers an advanced interface which allows investors to participate on the exchange in real-time through personal computers and gives them rich stock market information.

The C-TRADE platform has also brought about Investment Clubs which allows a group of individuals to invest as without the need to converge physically. The challenges of the traditional investment clubs which include lack of trust amongst group members, lack of transparency and honesty, poor record keeping systems, inadequate administration skills, and limited access to capital markets among others have become a thing of the past. The C-TRADE investor club is a service provided on the trading platform that pools funds of participating members online with the primary goal of enabling participants to buy shares in bulk. Participants of investment clubs have the option of depositing contributed funds into one account on the C-TRADE platform and using that same account to buy shares through the use of an administrator hence bringing about convenience.

The C-TRADE platform ultimately allows investors to choose from two marketplaces; the Zimbabwe Stock Exchange and the Financial Securities Exchange with each market catering to the varying preferences of investors, whether immediacy of execution, or best price, or least market impact, or different type of trading system altogether.

Finally, technology continues to increase the globalisation of the capital markets. The wall between competitors, built by geographic boundaries and time zones that once dictated and furthered nationalistic views toward commerce, will continue to fall because of better and lower-cost communications and analytics. Access to, and for, foreign capital markets and foreign users of capital through today’s technology has become increasingly simple.

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