Artificial intelligence (AI) is an increasingly important part of the financial technology sector, specifically in analysing stocks and providing insights into the markets that human analysts alone can’t make. As such, AI-driven funds hold an increasingly large portion of the market, moving this technology into the mainstream. The result is a large opportunity for investors using this technology or investing in the companies producing it. Significant steps are being taken by companies such as AnalytixInsight (ATIXF Profile), whose flagship CapitalCube cloud-based analytics empowers investors to evaluate the potential of companies and portfolios. Other companies are also taking note of AI’s increasing value. TD Bank has snapped up a young but highly valued AI company as part of a broader AI strategy, while Helios and Matheson Analytics, Inc. has seen its share price rise as it expands its AI-driven Big Data strategy. Even Thomson Reuters, owner of the original human-driven reporting and analysis company Reuters, has taken an interest in AI analysis, as has Euronext NV, a European stock exchange.
AI investment strategies
AI can be an incredibly powerful tool for analysing markets. The power of modern computing has made several techniques available that weren’t before.
The most important feature of financial AI is its ability to process large volumes of data. This lets the AI look for patterns that a human might miss and recommend strategies based upon them. Some of the data is obvious stuff – past performance of companies, investment in competitors and the behaviour of other investments. But given the huge amount of data we all create as we go about our lives, it goes beyond this. Credit card transactions, news items, even social media chatter can be factored in by increasingly complex analytical algorithms. Computer programs can identify patterns too broad or too subtle for humans to notice and use them to direct more profitable investments.
Then there’s modelling. A different sort of program can be used to predict the outcomes of investment options. The computer considers what will happen to an investment in a range of different circumstances and suggest an optimum strategy based on this. Like academics producing economic forecasts, AI can predict what the most profitable options are likely to be. This is tied to machine learning, in which computers evolve their own thinking strategies through observing what works and what doesn’t.
One of the greatest advantages of investment by computer is the speed it allows. Conclusions can be drawn and acted upon much more quickly. This allows the timely buying and selling of stocks in an ever-accelerating market, ensuring that profitable opportunities aren’t missed.
Big Data insights
An AI company specialising in financial analysis, AnalytixInsight transforms Big Data into useful knowledge. The company’s proprietary machine-learning technology analyses huge volumes of data, turning figures into actionable insights. With strategic initiatives in FinTech, blockchain and workflow analytics, AnalytixInsight is exploring the potential of data-driven decision-making for not just FinTech but other sectors, including sports, communications, healthcare, insurance and government.
This analytical power is primarily deployed though CapitalCube.com, a portal providing financial research and analysis. CapitalCube carries out over 100 billion computations daily, churning through the vast sea of financial data to create meaningful insights for investors to act upon. Its outputs include on-demand fundamental research, portfolio evaluation and screening tools on over 50,000 global equities and North American ETFs. CapitalCube provides 3,000 reports a day, including in-depth analysis, peer-to-peer performance evaluations, accounting and earnings reports, dividend strength and information about likely upcoming corporate actions such as dividend changes and acquisitions. This empowers investors to make the best decisions based upon the data.
Free access to basic financial information helps draw customers to CapitalCube. Consumers have the option to pay $25 per month for in-depth analysis and predictive analytics, or $300 per month for customised peer analysis. Partnerships with Thomson Reuters, Africa Investor, Euronext NV, Yahoo Finance, and The Wall Street Journal add to the depth and breadth of CapitalCube’s coverage.
AnalytixInsight has recently announced plans to augment its AI platform by working with blockchain technology. Blockchain allows information, including financial transactions, to be quickly and securely transferred between users. By creating a distributed information storage system, it allows quicker transactions which will lead to reduced transaction costs and settlement times for users of CapitalCube and the company’s other products. The company believes that this will lead to even greater revenues from existing multi-year agreements with partner companies.
This blockchain technology will also be used to enhance the services provided by Marketwall, a 49% owned subsidiary of AnalytixInsight. Marketwall is preparing to deploy a mobile stock trading and banking app connected to the MarketHub trading platform.
Projects such as the Marketwall app have the potential to increase both the insights from the company and its customers’ ability to act upon them. Use of the mobile app will generate data on investment patterns, which can in turn be used to power the Big Data analysis that fuels CapitalCube.
The company’s analytical potential is further boosted by Euclides Technologies, a subsidiary company focused on Field Service Management software solutions. With worldwide customers representing over 100,000 field service personnel across multiple industries, Euclides Technologies has to work with the growing volume of data generated by that industry. As a result, it is developing analytics to turn Big Data into useful insights.
Strategic partnerships for better analysis
The latest development for AnalytixInsight is a distribution agreement with Thomson Reuters, the world’s leading source of news and information for professional markets. Thomson Reuters will provide AnalytixInsight with financial data gathered as part of its reporting work and distribute AnalytixInsight’s AI-driven financial research reports. Together, the two companies will create AI research on public stocks, which will be carried on TRI terminals to brokers across North America. It’s a move that will boost the profile of AnalytixInsight through association with the historic Reuters brand.
The deal with Thomson Reuters reflects the reality of AI’s place in FinTech. Computer intelligence isn’t taking over from human decision making. For the most part, it is providing extra insight for human traders to work with. Systems such as CapitalCube can provide insights that humans can’t, but the reverse is also true. It’s through combining human and artificial intelligence that companies like AnalytixInsight provides such profitable results.
Another of AnalytixInsight’s partners is Euronext NV, a European stock exchange. Euronext now provides access to CapitalCube for its customers, extending the reach of the technology and its personalised reports.
The leading Pan-European marketplace, with offices across Europe, Euronext focuses on bringing together buyers and sellers in venues that are transparent, efficient and reliable. Combining exchanges that have been at the heart of European capital markets for centuries, it now combines that sense of tradition with a forward-looking investment in new technologies such as AI.
Euronext provides a wide range of data products through its Market Data portfolio, including real-time data feeds and historical and reference information. It is a leading global provider of indices, publishing more than 500 benchmark indices of all sizes and profiles, including the benchmark AEX-Index® and CAC 40® Index, as well as third party and partner indices. These provide insight into investor sentiment and the performance of the Euronext markets. Combined with the insights provided by CapitalCube, it gives a wide range of insights to subscribers.
Applying AI elsewhere
TD Bank Group has also shown a great interest in developing AI as part of its FinTech portfolio. Its acquisition in January of Layer 6 Inc., a Toronto-based AI firm, is only the latest in a series of such moves. TD has collaborations with the Vector Institute for Artificial Intelligence, leading conversational AI provider Kasisto and retail giant Amazon. This has allowed it to deploy AI not only in market analysis but also in customer relations, providing a faster, more accurate service.
Financial interest in AI beyond FinTech is reflected in the rise in shares of Helios and Matheson Analytics when its Zone Technologies subsidiary announced the completion of beta testing of proprietary AI technology. Created by a team headed by Dr. E.G. Rajan, who has spent over 30 years researching AI and machine learning, the technology will appear in the company’s RedZone Map app, which analyses recent crime patterns and predicts criminal activity.
The complex future of Fintech AI
AI undoubtedly has a significant place in the future of FinTech. The range of companies investing in this technology, together with the positive response of investors to AI announcements, reflects its increasingly important role. AI allows the effective analysis of huge data sets to quickly provide insights that wouldn’t be possible just through human judgement.
The big steps forward in AI analytics are likely to come from companies with access to large data sets and a broad portfolio of applied analytics. By partnering up with a range of companies on CapitalCube and other products, AnalytixInsight has put itself in a position to be one of those industry-changing companies.