Turkey is an emerging market, which means it has a burgeoning financial sector that’s destined only for greatness. However, the financial sector is not yet as sophisticated or as varied as in developed countries. I think that eventually, our financial sector must embrace all the sophistication and financial technology in developed markets. In particular, I expect there to emerge all sorts of funds, as well as all sorts of financial instruments. The futures and options market has taken off quite well, but there is much more ground to cover. Not necessarily prediction markets, but surely there is room for more varieties of derivative markets. Only the BIST-30 futures is liquid enough to trade, yet.

I also expect there to be an opportunity for personalized or institutional financial technology as people wish to make the most of their investments. For instance, the financial advice products are sooner or later going to be useful for Turkish investors. As for catching up with the contemporary financial innovations of today, such as crowdfunding or digital currencies, I am not holding my breath, but I would think that there are interested parties.

Aside financial advice products, there is an opening for many kinds of innovative funds that could do better than the dubious benefits of new private retirement funds. One of the most interesting developments is the Venture Capital funds, backed by extremely advantageous laws which seem to have persuaded some traditional business owners to transfer some profits to the new field. However, I would also expect there to be more connections to global markets, both in the sense of benefitting from the returns of the global market and directing more foreign capital to Turkey.

These would also necessitate a stronger financial technology industry, which must allow new finance firms to compete in the global market and against existing financial institutions. Financial technology companies are nowadays offering everything from advanced database products, and cloud solutions to online brokering in global markets and infrastructure for high-frequency trading. There is no reason why Turkish computer companies should not compete in this high-technology, high-return sector.

It is indeed interesting how lagged behind Turkish financial thinking is, when the world has finally embraced the dangerous but promising technology of bitcoin, and there is a surge in private exchanges of all sorts. I did make a proposal for a digital currency system once to a web-oriented startup in Turkey a few years ago, when bitcoin was anew, however, they did not have the means or knowledge to evaluate the merits of my proposal. Perhaps after the success of bitcoin, people would have understood the true potential of digital currency. Complete digitization of economy is a certain outcome of the internet. And that means as much departure from traditional forms of commerce, as web publishing is from traditional press.

Financial sector in Turkey


Eray Özkural has obtained his PhD in computer engineering from Bilkent University, Ankara. He has a deep and long-running interest in human-level AI. His name appears in the acknowledgements of Marvin Minsky's The Emotion Machine. He has collaborated briefly with the founder of algorithmic information theory Ray Solomonoff, and in response to a challenge he posed, invented Heuristic Algorithmic Memory, which is a long-term memory design for general-purpose machine learning. Some other researchers have been inspired by HAM and call the approach "Bayesian Program Learning". He has designed a next-generation general-purpose machine learning architecture. He is the recipient of 2015 Kurzweil Best AGI Idea Award for his theoretical contributions to universal induction. He has previously invented an FPGA virtualization scheme for Global Supercomputing, Inc. which was internationally patented. He has also proposed a cryptocurrency called Cypher, and an energy based currency which can drive green energy proliferation. You may find his blog at http://log.examachine.net and some of his free software projects at https://github.com/examachine/.

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