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TechvisionJune 1 2015

Invstr democratises investment information

A new mobile app is bringing real-time investment information to people on their phones at a fraction of the cost of traditional sources. Jane Cooper talks to the chief executive of invstr about what this technology could mean for banks. 
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Invstr democratises investment information

The concept of democratisation runs through many fintech innovations. Not least invstr, a new mobile social networking app, which is all about enabling access to financial information. Invstr gives individuals access to information that was previously available only to professional investors.

Kerim Derhalli, chief executive of invstr, says self-directed investment is a clear trend, especially in markets such as the UK, which has reformed its pension rules so individuals have more choice over how they invest their assets.

The rise of self-directed investment comes in the wake of the financial crisis, which for many put paid to the idea that investing is best left to the professionals. And various technological advances also mean individuals are able to do more themselves.

There are other fintech ventures with a similar idea, such as the iBillionaire app that gives a view of how the world’s wealthiest investors, such as Warren Buffett and Carl Icahn, are investing. And eToro functions like a social network for individual investors so they can follow what successful investors are doing. These technologies are based on the idea that individual investors would benefit from mimicking the professionals. Invstr, however, is about enabling individuals to do it themselves.

The cloud-based app delivers real-time market data on 70,000 companies and 4 million instruments, and also gives access to analyst reports and financial news. ‘Gamification’ is a feature, so users can play and learn how to invest before risking their own money and doing it for real.

Wisdom of crowds

Invstr, which is headquartered in London and has a development office in Istanbul, has a number of other features. The app aims to unleash the “wisdom of the crowds” and make predictions that are insightful to the users. And if, as Mr Derhalli hopes, the app is the means by which most people do their investing, it could have an impact on the financial market itself. 

“If [there are more] individual investors, then the structure of the market will become efficient. It will strip out the layers and become cheaper, more efficient, fairer and more stable. The risk will be spread more broadly,” says Mr Derhalli, a former trader at Deutsche Bank.

On top of the financial information layer, the app also has a social layer that takes its cue from the likes of Facebook and LinkedIn. The app also has a messaging function so investors can contact each other with the same ease of use as WhatsApp. “People want to interact, be social and make money, and they want to do it on their phone,” says Mr Derhalli.

The access to real-time market data is offered on a pay-as-you-go basis and is affordable, unlike the expense of a Bloomberg terminal, which has previously meant only professional investors have access to the information needed to make timely investment decisions.

Cost structure

Users of the invstr app have the choice of seeing live or delayed data, with the real-time data costing as little as one cent per day per financial instrument. Access to commentary and research reports costs more and there is the option to subscribe to the information on an annual basis.

This kind of service, however, does not mean the disintermediation of banks. For example, they could offer this app to their clients. Mr Derhalli is open to white-labelling the service and co-branding it with a bank’s brand so banks are able to offer their own mobile solution for distributing the content. Mr Derhalli says the business model could take various forms; for example, the bank could be a licensee of the invstr app and then offer the service to its clients free of charge.

Banks have a challenge in the mobile world of ensuring their information is used above all others, says Mr Derhalli. If banks are only offering their own research, the individual will inevitably look elsewhere to supplement that information. This carries the risk that they will move away from the bank for good. Mr Derhalli believes invstr prevents that from happening by giving individual investors access to everything they need, all in one place. “People do not have the time for single bank platforms,” he says.

In the process of developing invstr, Mr Derhalli also hopes to be part of a wider social revolution. Disruption has occurred elsewhere, he says, yet the financial world has yet to experience the overhaul that online and social technologies have unleashed. Now it is time for it to occur in the investing world, he says.

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Read more about:  Digital journeys , Tech vision