Fintech Genome

Artificial Intelligence in Wealth management - Fintech listings

#1

Fintechs using Artificial intelligence in wealth management to discover FIRST investment opportunities, categorized by their focus (excerpt from the article “AI in Wealth Management” on Daily Fintech):

NLP

The financial answering machine, Kensho, which we profiled a year ago in Kensho: Warren is like Watson and Siri, for analysts, investors and traders, is using a natural language based algorithmic technology. It is clearly a threat to financial analysts and to asset managers, whose ability to process and interpret financial information maybe replaced by a machine. Kensho and Aylien based in Dublin, are both faster and can extract value from text by using deep learning techniques. They process news and media info, research and business documents. Palo Alto-based Sensai, also uses natural language processing to help companies analyze unstructured data, such as corporate documents, transcripts and social media.

Sentiment analysis

Focused on sentiment analysis that generally uses NLP and statistics and machine leanring, Sentifi, is a Swiss based company that uses crowd sourcing algorithms to provide actionable investment advice to large financial institutions and to financial media companies. They currently offer 4 products: myMarkets; myPublishing, myCompany, myScore.
Amareos from Hong Kong, also contributes to financial decision making based on sentiment analysis (heatmaps and data visualization) with a tilt towards analytics and indicators used in trading systems and risk monitoring.

Combining sentiment analysis from crowd sourced data & quantum encryption, Running Alpha is offering a smarter way for seeing investment opportunities before they get noticed; helping investors be first at exploiting high-impact performance trends with confidence. They offer two sophisticated heat map products classified as Sentiment-Aware Portfolio Solutions: the Grid 100 and Focus 15. A subscription based serviced for retail and asset managers to generate alpha by shedding light into dark information (dark through a human eye lenses).

Predictive analytics

EidoSearch, a Canadian company using advanced pattern recognition by processing large data sets (crowd sourced info) and producing probabilistic predictive analytics. They recently announced a partnership with Stocktwits, to enhance their idea generation and risk management abilities; bringing to the masses more power to uncover investment opportunities before they are all priced in.

I know First, provides daily investment forecasts based on an advanced, self-learning algorithm. These powerful predictive analytics are based on Artificial Intelligence and Machine Learning with elements of Artificial Neural Networks and Genetic Algorithms; results are delivered on your mobile; another enhancement for DIY traders.

Clusters in real-time

For professional traders, to protect themselves from dark or speedy events like those hidden in HFT trading, flash cards, and other algorithmic activities; AbleMarkets research that can be used by fund managers, family offices, brokers and exchanges.
Another U.K. startup, AlgoDynamix claims it can warn you before the market undergoes a nasty selloff. It uses real-time data from exchanges, looks for patterns and searches for clusters of traders who are bailing out of an investment. AlgoDynamix provides clear and visual signals when sellers are gaining strength before a broad slide kicks in.

This is a taste of the powerful, even though incremental, changes in discovering investment opportunities. They are sourced from algorithmic enabling technologies applied in areas as natural language processing, behavioral finance, sentiment analysis, predictive analytics, pattern recognition. Business models of these fintechs are mostly subscription based and democratize the space of such technologies that were strictly available to large institutions.
Celebrating AI in digital asset &wealth management, continues. We started with ten picks for the discovery phase: Kensho, Aylien, Sensai, Running Alpha, Sentifi, Amareos, EidoSearch, I know First, Ablemarkets, AlgoDynamix.

#2

Fintechs using Artificial intelligence in wealth management to develop Algorithms (excerpt from the article “AI in Wealth Management: Algos” on Daily Fintech):
Early stage startups focused on using advanced quant techniques for trading are mainly focused on machine learning techniques to calibrate models that manage money typically on a discretionary basis.

Walnut Algorithms out of Paris, is applying latest advances in data science and machine learning research to the financial markets. They combine advanced machine learning techniques with financial expertise to generate medium to high frequency pure alpha strategies. Euklid, out of Italy, employs a sophisticated AI engine capable of making independent trading decisions. The AI is based on complex algorithms which are monitoring technical indicators and analyzing market trends. Both are StartupBootcamp Alumni. Euklid has a much broader vision of becoming the first AI bank, offering digital crypto currencies and employing smart contracts.

_ArtQuant_, out of Moscow, has created a product PortfolioandMe, positioning AI as a service for portfolio advice, monitoring and construction. If the customer chooses the in-house portfolio construction, then the AI algorithms of ArtQuant are used with a fundamental analysis approach.

Similar to a hedge fund approach, Aidyia, from Hong Kong, is taking AI in finance to the next level, acting as an asset manager with a long short equity fund. Aidyia plans to launch more fund products using quant techniques from genomics and robotics.

Another company taking general business intelligence algorithms and applying them to financial trading, is Sentient technologies, a San Francisco company who got more than $100mil funding at the end of 2014. Sentient has been trading with AI systems over the past year (no fund product available yet) operating in the discretionary management space. In last week’s article in BBC news, Would you let a robot invest your hard-earned cash? Sentient AI was mentioned as one of the two companies focused on training algorithms to learn from past mistakes and refine their rules, without the need for much human intervention. New-York based Rebellion Research is the other one, which is offering machine learning asset management. They offer a basic Global Equity strategy, which has been managing money since 2007 via a Hedge Fund structure and as well as in managed accounts. They also offer the possibility of creating a Market neutral strategy; an absolute return strategy and a US bond strategy. These sophisticated strategies are available through managed brokerage accounts at Interactive Brokers.

Another brokerage firm getting involved in AI more directly is Silicon Markets, a Fin-Tech, that uses MT4 platform and a customized version of it for its brokerage business, Tradable. Silicon markets is launching a Machine Learning Trading Optimizer which will be integrated with Tradable.

Fintechs threating directly professional asset managers, are those also that empower the DIY retail traders and create alpha directly for end users (investors).

Alpha Modus is delivering alpha directly to end-users through a marketplace of investment technologies they call ‘mods.’ These mods are priced according to how much alpha they generate, so investors can buy alpha on this platform without paying the conventional high fees of alpha-generating asset managers. One of the key technologies available in the Alpha Modus marketplace is the Early Look Imbalance Meter, which aims to predict the direction of the NYSE into the closing auction. Recently, Early Look mod has been combined with the IBM Bluemix platform, where they have incorporated Watson’s Insights and Twitter sentiment analysis. A live case study of cloud based collaboration between fintechs and incumbents.

Quantopian of course, belongs in this classification too, since it offers a platform for quant algorithms development, back testing, and also, is creating the first crowd-sourced hedge fund by backing selected investment algorithms.

Capitalico is a trading platform that makes quantitative analysis and algorithmic trading possible for everyone on a smartphone. With no programming skills, the platform allows you to build, test and trade an algorithm out of an idea with a few clicks and based on visuals of historical charts. A powerful tool for DIY traders, out of California. Alpaca is the company behind this platform, been developing Deep-Learning trading algorithms.

#3

Hi,
Thanks Efi, this is one of the most comprehensive and up-to-date lists.
I would like to add our InvestTech and WealthTech “Firamis”. We utilise Machine Intelligence coupled with Data (Network) Science to create asset allocations and to construct, monitor, health-check and rebalance portfolios. Since our economies and markets are getting more and more interconnected we have to account for the network effect in our diversification. Diversification is the only free lunch and we can do better with Machine Intelligence than traditional correlation analysis.
Best,
Jochen, Founder and CEO of Firamis.

#4

Efi, Thank you for mentioning I Know First in the predictive analytics section of your first post, just to add: besides our algorithmic predictive research product offered to diverse clients we added a layer of rules-based strategies, developed by utilizing the generated indicators. Those strategies are available for wealth management companies who would like to expand their active equity trading in partnership with I Know First in order to improve their risk adjusted returns and generate additional alphas.

#5

Emma AI is another AI powered hedge fund that has not come out with any results.

Sentient also continues to “hide” results.

The Eureka AI hedge fund index returned only 5% in 2016.

We are not there yet, are we?

#6

I really don’t think we are, but we’re getting closer…keep a close eye on the Point 72 & Quantopian combination. Point 72 has been doing at the forefront of “alternative data” for at least 5 years now and Quantopian is recruiting some good talent to go along with a useful platform (albeit, a no longer unique concept) and more importantly, an engaged community.

#7

@jordanhauer4 I know Quantopian’s approach and I agree with you about their community. I would also add their partnerships with other Fintechs as a strenght.
I am not familiar with Point 72 as some kind of innovator. I thought of them as a quant traditional hedge fund that changed its name 3yrs ago after a compliance breach.

#8

@efi Well Point 72 is investing $250M into a Quantopian fund, in essence creating a new crowdsourced algorthimic hedge fund, in addition to a $25M equity investment they’re making into the company itself. But within Point 72 as well, they are very innovative and have one of the more unique structures to allow for innovation within the fund itself

#9

I think one of the most interesting developments in this space is Numerai and their recently launched Numeraire ICO (cryptographic currency). They are essentially creating an anonymous, automatically managed, quantitative hedge fund by incentivizing data scientists across the world by giving them access to hashed data and rewarded those that create the best algorithms. Huge gamble/experiment, but backed by some big names, like Fred Wilson.
I personally don’t think it will be easy to create the best algorithms if you don’t know the context of the data, which you won’t in this model since what you see is all hashed, but the success of the incentive structures are going to be very interesting to follow.

#10

Great thread. Thanks for sharing and congrats to Efy for raising the topic, quite some months ago. There are other startups working on AI in wealth management that are quite discreet, or even on stealth, that might be of interest to discover in the coming weeks. Will try to find the time to make a post on that later on.

  • Disclaimer: I’m advising one of those*
#11

Welcome Jean-Michelle. You can share snippets here, until you find the time to write a post.

#12

Hi Efi, thank you for putting together a great exhaustive list. May I humbly add another one to the list MarketsFlow which is Machine Learning/AI based and allows fully managed Portfolio strategies with Active Asset Allocation/Re-balancing managed by the machine. The Portfolio performances are quite impressive from returns ,volatility and optimal investing ratios. You can check the performance here

#13

thanks @tomn for the suggestion.
Are these model returns?
If they are actual returns, then I would like to speak to them.

#14

thanks @Efi I will try and reach out to you directly to arrange that.