Latin American Capital Markets

INTERNET TECHNOLOGY AND THE DEVELOPMENT OF SECURITIES MARKETS 69BreadthA common characteristic of Internet-based technology is widespread and almost instantaneouscommunication with other users. The Internet is accessible by any personwith a computer and an account with an ISP It is currently estimated that approximately544 million people worldwide access the Internet. 1 As table 3-1 indicates,the Internet increasingly is being used by people in developing economies as well asby those in developed markets. Consequently, the Internet offers the financial servicesindustry a number of uses. It permits the industry to disseminate information to awide audience. It also can be used to dispense investment advice, to make offers forthe purchase or sale of securities, and to effect transactions.Low CostInternet use is cheap. Dissemination of information is inexpensive, and the informationcan reach a broad domestic and international audience in seconds. Software programsavailable on the Internet make it possible to produce websites quickly and easily.The cost of access consists of no more than the telecommunication cost involvedin connecting to a local ISP and the ISP's fee. No special equipment is required, otherthan a personal computer, browser software, and a modem connection to the ISPThe overall low cost of access and dissemination contributes to the enormousamount of information made available to investors via the Internet.InteractivityThe Internet provides its users with an interactive form of communication. Graphics,audio, and written communication media are combined on the Internet to create informativeand appealing websites and messages. Moreover, this form of communicationwill become increasingly interactive as technologies such as voice recognition andvirtual reality are improved. Interactive features that, for example, grant the option ofpaying or sending in trading orders electronically allow investors to effectuate investmentdecisions instantly and take advantage of opportunities in a timely manner1 For current statistics on regional and global Internet use, see http://www.nua.ie/surveys/how_many_online/index.html.Copyright © by the Inter-American Development Bank. All rights reserved.For more information visit our website: www.iadb.org/pub