What is a platform?

You can think of an investment platform like a financial supermarket, which lets you purchase and sell a range of different assets including bonds, shares, funds, and so much more. Almost all platforms will have a web-based tool, but many offer downloadable software and smartphone apps.

The financial world operates in a digital space these days, and it’s facilitated by a number of different platforms, which allow investors to open/close positions, monitor the market, manage their portfolios, or simply access their bank accounts.

What types of platform are there?

Trading platforms are the most commonly used when it comes to investing, and these include brokerages and banks. Trading platforms come with a large number of features, and some do it better than others, so you’ll need to shop around.

Investors can also access fund platforms, which allow them to pool their money with other investors to reach higher-valued assets. Funds put into this type of platform are managed by an investment manager.

Online marketplaces are another type of platform investors can access, but they’re often built with collectables in mind. For example, investors can purchase NFTs, fine art, lavish wine, and other similar assets.

Where can I find information about a platform?

Finding information on different platforms will depend on what you’re interested in, but is a good place to start.

What are the regulatory requirements for financial platforms offering investment services to retail investors?

Financial platforms in the UK have to be authorised by the FCA (Financial Conduct Authority), which acts to protect the best interest of customers. Typically, this means preventing fraud, managing data properly, keeping assets secure, and offering unbiased financial advice.

This regulation even stretches to cryptocurrency exchanges operating in the UK. Even though crypto is viewed as decentralised because of the way blockchain works, an exchange is obliged to carry out a KYC (Know Your Customer) on each UK-based member. Doing this means that the space can be better regulated by the FCA, and helps to protect customers against theft and fraud. Additionally, the regulation in the crypto space helps to reduce money laundering, as an ID is attached to a digital wallet by the exchange.

What are the security measures taken by financial platforms to protect customer data and prevent cyber attacks?

Financial institutions are legally obligated to protect their customer data, which means putting up defences against cyber-attacks including:

Secure infrastructures. Encryption is used across servers, which masks sensitive customer data. Additionally, personal social media accounts and USB devices are often blocked in certain areas of the infrastructure.
Authentication. Under UK law, each financial transaction can only take place after the identity of the person initiating the transaction has been confirmed. This includes PIN, ID, and now multi-factor authentication.
Communication. Transparency between financial institutions and customers around security and current threats is essential. There will often be educational databases to keep customers updated.
Secure processes. There are countless processes in place to ensure security is withheld including KYC, non-disclosure agreements (NDAs), GDPR, and other DLP (data loss prevention).

A financial platform allows users to access a number of different services, ranging from trading systems to banking tools. They’re all regulated by the FCA and they’re obligated to protect user data.