Fortunately, we who lived in the 2000s are witnessing and witnessing one of the most important moments of transformation in human history. We know that the history of mankind in the most general terms is determined by 5 stages. These are the Hunter-Gatherer Society, the Agricultural Society, the Industrial Society, the Information Society (Society 4.0), and the Super Smart Society (Society 5.0).

The existence of hunter-gatherer societies BC Starts from 5000r. After this social order, which consisted of a small number of people who continued their lives by hunting, fishing and collecting plants for food, the agricultural society, which began in the polished Stone Age, and settled life brought about the industrial revolution. towards the end of the 18th century and moved to an industrial society. After the era of mass production and industrialization, Society 4.0, in other words, the Information Society, has entered an era that is identified with the Internet, the capabilities of computer processors, the interaction of objects with each other and the impact of all these developments on a person. social life, with an increase in value-added production. In fact, the information society still exists, and with Society 5.0, or in other words, the “super smart society”, an advanced version is being expressed in which the benefits of the information society are fully offered for the benefit of mankind. Man and society are at the center; It is aimed at creating a social model in which the positive impact of digitalization and artificial intelligence on social life is enhanced, the relationship between humans and machines and robots is ensured in the most efficient and balanced way, growth and development are accelerated with increased productivity, and the level of well-being of society is also increased.

In this historical development process, especially in the process of rapid change and development in recent years, the financial sector and its applications are undergoing important transformations as part of the information society, and digital applications, which are briefly called FinTech, are changing the habits of users of financial products, on the one hand, and increase their expectations, on the other. It is evolving into a framework that is changing and transforming business models, products, marketing styles and institutional communications. The technological devices used and the financial software used in the devices support the financial access of investors, increase financial quality and allow the creation of new personalized products. In other words, digitalization in the financial sector delivers financial inclusion exactly the way it is needed.

Credit cards in the 1950s, ATMs in the 1960s, and electronic exchange transactions in the 1970s can be considered pioneering FinTech processes.

FinTech is defined as applications that facilitate, enhance and automate the presentation of financial services using technology and, contrary to popular belief, have a long history. Credit cards in the 1950s, ATMs in the 1960s, and electronic exchange transactions in the 1970s can be considered pioneering FinTech processes. As can be seen, although the banking sector initially led the digital transformation of the financial sector, insurance, leasing, factoring and capital markets have also rapidly digitized and closed the gap.

On the other hand, digitalization efforts, which initially focused on the financial sector, have followed a process that has spread to the real sector and, ultimately, to the end user, i.e. the consumer. According to a 1991 analysis in our country, almost half of the investments in software and hardware were made by financial institutions in the Turkish information technology market, which was quite small at a time when information devices used by consumers were not yet widespread. . Then, as technology became a necessity for other sectors, and the explosion of consumer electronics in the 2000s, the adoption and use of fintech accelerated rapidly. The pandemic period we have been through has had a compelling but ultimately positive effect that has led to an increase in the usual pace of digitalization in Turkey as well as around the world.

Advances in technology, the acceleration of the Internet, and the expansion of mobile device usage are driving users to use digital channels that are faster and more accessible than traditional distribution channels. The increase in the use of artificial intelligence, the widespread use of wearable devices, access to data in seconds unimaginable in previous years, and the use of this data in decision-making processes are affecting the existing business models of financial institutions.

Today, when competition and technology are rapidly developing, artificial intelligence technologies, robotic consultants, machine learning, and financial institutions are increasingly being offered to depositors. Thanks to the joint placement service, trading orders on our exchange are completed in milliseconds, high-frequency transactions (HFT) and algorithmic transactions, in other words, transactions made by software without human emotions increase their share. in total by day.

Foreign equity investment, which started 2020 at $531 million, reached $806 million in the third quarter and $1.55 billion in the final quarter.

Today, it is possible to monitor data in financial markets simultaneously on computers or mobile phones, manage investment funds, buy and sell shares in Turkey and even in stock markets around the world, change individual pension plans and receive investment advice from financial technology advisors.

According to the Central Bank’s international investment position data, in the last quarter of 2020, Turkish investors’ foreign investment in equities reached $1 billion 55 million. This data indicates an increase of 102 percent compared to the last quarter of 2019. Foreign equity investment, which started 2020 at $531 million, reached $806 million in the third quarter and $1.55 billion in the final quarter. 77.4% of foreign equity investments are in the US. It is followed by Europe at 17.5%, and there is even equity investment in Asia, Africa and Australia, albeit at a low level. According to the Central Bank, 63.8 percent of those who buy shares abroad are households. Second, while intermediary institutions had a share of 19.3 percent, companies preferred 0.5 percent, and banks preferred foreign equity investment at a ratio of 16.4 percent. Even if the prerequisite for this development were foreign exchange investment appetite and high returns on world stock markets, it is obvious that this development would not have been achieved if financial technologies had not been so developed and access to foreign exchanges had not been provided.

On the other hand, while restrictions on circulation and a decrease in physical mobility during the pandemic have increased the level of use of mobile channels, the growth of digitalization and the ease of transactions have created a favorable environment for many new investors to enter local capital markets. In our country, the number of accounts with internal individual commodity balances, which was 1,231,115 people in January 2020, reached a peak in its entire history, increasing by 925,168 people over the year, reaching 2,156,283 in January 2021 and 2,661,045 in April 2021.

After these figures, in which the growth caused by digitalization in the financial sector is strikingly visible, if we need to talk about more advanced applications in digitalization, crowdfunding platforms, blockchain and cryptocurrencies with their sizes, which carry our financial universe to society 5.0, come to the fore.

Dr. Berra DOGANER

Member of the Board of Directors of Pyramid Securities

He was a lecturer at the OSTÄ°M Technical University.

Random Post