AI is Poised to Transform Financial Services

By Martijn Rasser, Director of Analysis, Kyndi

At first blush, the latest advances in artificial intelligence (AI) portend unprecedented disruptive change for the finance sector. The imminent widespread adoption of AI is better thought of, though, as a quick evolutionary spurt—a punctuated equilibrium—in a history spanning decades. The world of finance has long been a vanguard of computing and automation. Automated check processing dates to the 1930’s, institutional quantitative research firms are rooted in computing advances achieved in the 1960’s and 1970’s, and automated trading systems have been well-established for over a decade. Novel AI solutions being adopted today should be viewed as just the latest step in an ongoing effort to improve productivity and efficiency.

The latest AI software will improve current practices and introduce new capabilities for a broad swath of activity, from customer service to better trading algorithms. With our Explainable AI™ Platform, Kyndi is at the cusp of delivering game-changing ability to process, understand and analyze massive data sets, keeping compliant with regulations and detecting fraud.

Making Sense of Big Data

Information, knowledge and timing are key to successful investing and achieving alpha. Kyndi’s technology empowers portfolio managers and analysts to process, understand and analyze very large data sets in minimal time, and anticipate change to make critical investment decisions quicker than ever before.

Analysts face an ever-increasing volume of information that impacts the value of a fund’s assets and needs to be understood before making new investment decisions. Armed with only conventional tools, analysts spend thousands of hours poring over company filings, press releases, earnings calls, newspaper articles and blogs, yet they often have trouble finding the nuggets of information that give an investor the edge. The volume and breadth of information—millions of pages published every month—make it difficult and time-consuming for analysts to leverage the data and nearly impossible for investment teams to make sense of it all. As a result, information essential to the portfolio is missed and new opportunities go undiscovered.

Kyndi’s breakthrough technology in natural language understanding augments cognitive capacity far beyond human limitations. Our software can analyze millions of pages in a matter of hours and create easy-to-digest summaries. Kyndi’s patented Cognitive Memory technology –a graph analytics engine—not only quickly answers questions, it learns from them to find similarities, generate analogies and hypotheses, draw inferences, and find other information sources to fill knowledge gaps. Critically, Kyndi is not one-size-fits-all: you can customize the software to find key signals you seek in the noise for a special edge (e.g., assessing technology maturity, level of innovation or time-to-market in aerospace). With Kyndi you can get ahead of developments, uncover hidden gems, fill knowledge gaps, and free up time for qualitative analysis, due diligence and field research to generate market-beating returns.

Keeping Compliant with Financial Regulations

Maintaining compliance is more important—and more difficult—than ever. The bank regulatory environment in the United States is highly fragmented, with numerous regulators at the federal and state level. Banks and financial institutions that operate internationally face different rules and regulations in each of the countries that they have a presence. Many organizations have disparate computer systems to manage compliance processes and programs, raising costs and increasing the risk of accidental non-compliance.[1]

The Kyndi Platform offers a user-friendly and easily deployed solution to triage and gist financial regulations. Using our visualization tool, you can create graphs of financial regulatory information to map overlap similarities and differences between rules from different regulatory bodies. Finally, use Kyndi to quickly identify and isolate potential problems—Kyndi excels at amplifying weak signals and finding insight in noise. Explainable AI™ lets you understand why items are flagged as potential compliance issues in plain English.

Detecting and Preventing Fraud

There are myriad fraud detection and prevention challenges: increasing volume and sophistication, inefficient processes at targeted institutions (e.g., information silos in business units), cross-channel fraud at banks, slow detection rates, a dearth of enterprise-wide fraud management programs, cost vs. benefit of fraud investigation process, and determining data accuracy.

The Kyndi Platform mitigates these challenges by letting you triage large datasets so that human analysts can focus on the highest-risk cases first. Kyndi is also developing a range of signals that identify indicators of deception, anomalous activity, and emerging patterns of potential fraud, while the Kyndi Explainable AI™ Platform lets you query and audit these indicators.

Transparency and Explainability

Kyndi’s Explainable AI™ means that a human user will be provided with the rationale and full audit-trail behind any results provided and how they were derived. Kyndi’s platform allows the user to understand Kyndi’s level of confidence in its results, be aware of any uncertainties, and anticipate how the platform will work in the future. By providing a full audit-trail behind all of its results, Kyndi’s Explainable AI™ remains fully transparent in its operation and is therefore essential to informed, confident analysis, and decision making.

We invite you to contact us to learn more about Explainable AI™, and subscribe to our blog below. You can also connect with us on Twitter and LinkedIn.

 

[1] https://www.metricstream.com/whitepapers/html/financial_services.htm

 

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