Large institutions have to adopt AI technology in order to scale while remaining user centric, according to Arkera co-CEO Vinit Sahni (right in picture), in a research interview with FinTech Global.
AI and machine learning technology has been one of the big new technologies to not just change the FinTech space, but become an integral aspect of most industries. Data collection and analysis, process automation and improved accuracy are just some of its use cases that are driving up its adoption. Arkera, a technology platform for discovering investment opportunities in Exchange Traded Fund (ETF) products, is utilising this technology to help investors make better informed decisions in the market.
Sahni said, “Machine learning and AI can process huge amounts of data and when you inject financial domain knowledge into this process it can start performing at very high standards, with high consistency, low latency and this process is fully auditable therefore a real solution and problem solver for both the institution and their users.”
The ability to integrate intelligent automation for manual processes can help speed up and simplify the sales processes for financial institutions. Within the ETF investing space, advisors and salespeople need to catalogue masses of information on their clients, and this takes up a lot of valuable time. Sahni added, “Advisors don’t find it the best use of their time and would rather have it automated. Investors on the other hand want to invest in ETFs and there is no one helping them, therefore a disconnect and opportunity in the market.”
AI technology is not a piece of technology that institutions can choose to use or not, but is a big part of the future. In a recent interview with Dawn Capital general partner Haakon Overli, he stated that it’s such a key part of society that companies just offering AI technology alone cannot survive.
On AI technology adoption, Sahni said, “I don’t think any large institution has a choice, the user demands this experience and it’s the only way institutions can scale with high proficiency and profitability.”
Founded in 2015, Arkera provides financial institutions with real-time information to make better investment decisions in the ETF market. Their platform uses machine learning and AI technology to build personalised experiences and connect real-time events and news with relevant investment opportunities. The platform analyses more than 100,000 pieces of news daily and correlates this with 1,500 different ETFs. Initially, the company is focusing its services on the brokerage industry.
The company closed a £4m funding round in April this year, with XTX Markets and Alan Howard leading the investment. Other participants to the round included DoCoMo Digital and Henry Ritchotte, ex-Deutsche Bank COO, among others, and the capital will be used to develop further its machine learning technology and expand its global footprint.
Arkera recently launched a mobile app for self-directed investors on the US and UK app store and is in discussions with large brokers and ETF issuers to help them drive investment activity and customer engagement. In the future, the company will look to broaden its offerings and add additional content, data sources and products.
“We picked ETFs because they are complex products, unlike stocks and FX, you need to use cognitive abilities to make choices. That’s a massive value add. There’s thousands of instruments, how do you study each one? They’re also one of the fastest growing asset classes with issuance of over $5 trillion and massive growth within the retail segment. They are low cost, transparent instruments, therefore a preferred choice for retail investors.”
There was $2.5bn invested into the global WealthTech sector during 2017, according to data by FinTech Global. Over two thirds of this funding went to the personal finance and online banking sub-sectors, which raised a total of $887m and $833m, respectively. Retail investing and trading was the third biggest space in WealthTech, with $470m being deployed globally, representing around 19 per cent of total funding.
Last month, the company hired former head of ETCs at ETF Securities Townsend Lansing as its new chief commercial officer. In this new position, Lansing will oversee the deployment of Arkera’s ETF platform for brokers and retail investors in Europe and North America.
Copyright © 2018 FinTech Global