The global stock market increased by $17trn in 2019 alone, and despite the difficulties and uncertainties brought about by the pandemic, it is showing no signs of stopping its growth. Online stock traders are poised to take advantage of this growing market; however, security problems can hinder their progress and even potentially lead to big losses. New fintech systems can help keep online stock trading secure.
AI fraud detection
Fraud is a rising problem in many industries. As technology continues to advance, criminals are able to evolve their own tactics. Luckily, there is technology that is just a step ahead of scammers. Artificial intelligence (AI) is an emerging technology that is becoming increasingly used for both simple and complex tasks alike. Readers might be familiar with the concept of AI taking over routine tasks in offices or otherwise used to increase user convenience. AI fraud detection is less discussed, but certainly no less important.
AI anti-fraud technology is a security method some payment giants such as Visa and Mastercard are leaning into. The AI software analyses business and consumer data to determine which are the most at-risk. This same principle is used in online stock trading, but with an additional step. AI can analyse incredible amounts of data in a short time period, allowing it to detect patterns or trends that are consistent with criminal behaviour.
SASE solutions
Secure access service edge network (SASE) technology combines multiple systems to provide users with a secure cloud storage solution without compromising on performance. More typical cloud services abound, but online stock trading encompasses large amounts of data that could have serious consequences if leaked.
Because SASE connects multiple servers, it is able to implement rigorous security methods on all of them. This makes it easier to protect data without removing the convenience of the cloud. This means that online stock trading can be both secure and practical.
Blockchain systems
Online trading often involves large sums of money. Moving multiple millions of dollars, or more, can take time, and this leaves the money and shares frozen until the transactions are completed. Not only does this leave them potentially open to risks from cybercriminals, but it can also lead to a significant loss of funds for certain entities. Large banking institutions, for example, can lose millions or billions of dollars every year due to the time their money remains frozen.
Blockchain reduces both these issues. The technology not only allows funds to be sent via decentralized database, providing less of a target to opportunistic criminals, but it can also complete large transactions surprisingly quickly.
Regulatory technology
Also known as regtech, regulatory technology refers to technology that manages regulatory processes in the financial market. There are three main functions of regtech to keep in mind: reporting, monitoring and compliance. It excels at each of them and is most often used to monitor real-time transactions for any unusual activity that might indicate fraud. This is similar to artificial intelligence; however, this is a more focused tool designed for machine learning and big data.
While regtech is monitoring transactions, it also provides real-time information on existing or potentially developing issues. And because it is so good at what it does, it is used to ensure businesses remain in compliance with safety regulations designed to protect data.
This tool is especially useful for stock trading. As the market grows, the amount of fraud online stock traders experience also increases. Various security regulations are implemented in an attempt to thwart this activity, but sometimes manually complying with those regulations can be time-consuming. Regtech is the solution. The technology monitors transactions for security issues while simultaneously keeping individuals and businesses alike in compliance with safety guidelines.
Safe mobile trading
Part of the allure of online trading is its convenience. The ability to trade from anywhere, even without access to a desktop computer, is an incredibly appealing one. It is not always a secure option, however, especially since mobile technology is often less stringently protected than more traditional desktop devices.
Luckily, secure trading is possible for mobile devices. Companies such as Plus500, for example, develop a secure platform for online stock trading no matter where their users are located. This includes safe mobile trading via their iOS, Windows phone and Android apps.
Online stock market trading takes some time and effort to master. The education does not end when traders begin to make money either, as there is always something new on the horizon. For many, fintech systems emphasizing secure trading are an important element of safe and smart online trading.
