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The Internet of Capital Markets

By Jason Sankey, CIO, Franklin County

Jason Sankey, CIO, Franklin County

For the past eighteen months, I have yet to attend a technology event without hearing the buzz around the IoT. Discussion on the topic often involves how our world is changing at a rapid pace as a result of this growing trend. If you have somehow managed to miss the overuse of this term, the most simplistic definition for the IoT would be “connecting our world through technology”. Quite literally, it means connecting as much as we can–mobile devices, appliances, offices, lighting and heating in homes, transportation, cities, states and much more. The basic premise of the IoT is this: If it can be connected, it probably already is in some way or another. When you think about it, IoT is not a new concept, which raises the question: Why all of the recent attention? Ultimately, it is the result of how rapidly our world has changed over the course of the past few years. Five years ago, having the ability to connect your automobile to technology was considered a luxury; now it is a standard for most manufacturers. Another example is the accessibility of Wi-Fi as its coverage continues to grow. To meet the demands for instant information, both businesses and Wi-Fi providers are expanding their footprint by making wireless connectivity available for free. Think about the places where you spend your time– odds are you have Wi-Fi available in those locations. This was not the case five years ago.

"When the IoT can connect data halfway around the globe in an instant, the possibilities are endless"

Given the constantly evolving nature of technology trends, why should the capital markets industry care about IoT?

It is incredibly likely that we are all leveraging, albeit through different means, connectivity of information in the capital markets setting. Capital markets are driven by data: the more data we have to analyze, the more likely we are to make better financial predictions. Regardless, it should not be interpreted that the IoT (or increased data connectivity) will accurately predict the market and make everyone wealthy. It does have the potential, however, to provide us with better insight regarding market trends and patterns, thus producing more informative analysis through data. From a consumer’s perspective, meanwhile, the expectation of accessibility to information through connectivity is also on the rise. For example, the growing trend for banking is mobile access; we now expect to conduct the majority of our banking needs online. From depositing checks to transferring money—the activities we used to reserve for our brick and mortar visits—we can now complete these transactions in the comfort of our own homes. Consumers are looking for more empowerment as well when making decisions pertaining to investments.

The Future: Connected, Enhanced Access to Data

Consider this: access to more global information actually makes the world seem smaller. Although the influx of worldwide data through increased connectivity can be overwhelming, it also opens up heightened possibilities for collaboration and information sharing that was not easily attainable in the past. The potential to gain real-time data regarding international markets, patterns, and the factors that influence them can drive investors toward making timelier, more informed decisions about their investments, or leverage the data to develop completely new strategies. When the IoT can connect data halfway around the globe in an instant, the possibilities are endless.