In our Workforce Optimization: Work Smarter NOT Harder With AI/ML report, we highlighted:
- Workforce optimization (“WFO”), the optimization of employee performance, can drive costs down and revenues up for enterprises;
- WFO is gaining traction across several verticals, especially as COVID-19 has added layers of complexity to managing workers and associated workflows, and;
- Sophic Capital client AnalytixInsight Inc. (“AnalytixInsight” or the “Company”) [TSXV:ALY; OTC: ATIXF] is a pure play AI/ML firm with WFO solutions about to experience a new phase of growth via the IFS Partner Network.
This report is about how AnalytixInsight gained its AI/ML expertise by developing FinTech solutions used by well established marquee clients that include WSJ.com and Refinitiv.
Investment Research Production Is Under Pressure
Whether you peruse BBC.com, Bloomberg.com, or TheFarSide.com for your favourite Gary Lawson comic, compelling content is what draws readers, regardless of subject matter. Digital content is big business, with Technavio forecasting it will grow by US$519.83 billion from 2020 through 2024. However, companies that report financial information as well as traditional investment research content producers are facing multiple challenges:
- The number of publicly listed companies and ETFs places a natural limit on research content;
- Capital markets regulations forcing the separation of “sell-side” investment research costs from trading fees is massively disrupting the business model for producing traditional equity research;
- Regulations could require financial services firms to provide research to investors to aid their trading decisions.
Skate to Where the Puck is Going – Machine Produced Financial Research
AnalytixInsight’s initial foray into financial services began by addressing the opportunity to provide insightful analysis, computations, and financial content for tens of thousands of public companies and ETFs. Machines rather than humans can rapidly generate consistent, accurate, and reliable content for tens of thousands of public companies. From this idea, AnalytixInsight created its first AI/ML solution, CapitalCube, a financial portal providing comprehensive company analysis on over 50,000 global equities and North American ETFs. Institutions, stock exchanges, individual investors, and websites like WSJ.com and Yahoo! Finance rely upon CapitalCube’s on-demand fundamental research reports, peer analysis and screening tools.
AnalytixInsight’s AI/ML Effectively Provides Financial Research & Content
Unless a broker invests in a team of analysts, the only way to provide equity research on thousands of issuers and ETFs is to leverage AI/ML. Sophic Capital client AnalytixInsight [TSXV:ALY; OTC: ATIXF] is a pure play AI/ML firm that helps financial institutions and websites fill the growing analyst coverage void.
As we detailed in our Extracting Value from Artificial Intelligence & Machine Learning report, AnalytixInsight has a core AI/ML platform capable of over 100 billion daily computations to create machine-generated insights across multiple verticals. In Sophic Capital’s Workforce Optimization: Work Smarter NOT Harder With AI/ML report, we highlighted AnalytixInsight’s large workforce management opportunity, helping enterprises to optimize their human capital. However, AnalytixInsight first leveraged its AI/ML expertise by creating machine-generated insights and content for the financial services industry.
AnalytixInsight’s CapitalCube provides machine-created financial content on 50,000 global stocks, including underserviced micro-, small-, and mid-cap stocks, which we believe will see a decline in analyst coverage. CapitalCube transforms raw financial data into simple to understand narrative reports that are valuable for both novice and experienced investors, comparing an issuer to its industry peers to measure its strengths and weaknesses. CapitalCube’s capabilities include natural language generation (translating data into narratives), machine-created analysis reports, including earnings, dividends, and fundamental analysis. The platform is also capable of predictive analytics to forecast dividends, share buy-backs, and M&A actions. The Company expects to commercially deploy a robo-advisor product to its clients and money managers in the future.
In Sophic Capital’s Extracting Value from Artificial Intelligence & Machine Learning report, we noted that it doesn’t matter how good AI/ML code is; bad data given to an AI/ML solution will generate bad insights. Fortunately, CapitalCube accesses the best financial data available through a distribution agreement signed with Thomson Reuter’s former Financial & Risk business, now known as Refinitiv. In May 2018, CapitalCube entered an AI-driven research distribution initiative for research reports on Thomson One and Eikon terminals, which in June 2019 expanded coverage for an additional 3,000 companies. CapitalCube transforms raw financial data to not only generate research reports on 50,000 global stocks but also to drive a robo-advisor offering. CapitalCube’s customers include institutions such as Refinitiv and The Wall Street Journal. For investors who believe (as Sophic Capital believes) that AI/ML will become more important and prominent in financial services and capital markets, we recommend further investigation of AnalytixInsight.
Coming Up – AnalytixInsight’s Second AI/ML FinTech Solutions
In our next report, we will examine, how AnalytixInsight’s investment in MarketWall, its second major financial services offering, could help unlock value in micro cap stock AnalytixInsight. In part, this unit is aided by the move in 2007, where the European Union set standards of conduct and transparency for financial firms in its Markets in Financial Instruments Directive (“MiFID”), which was overhauled in 2018.
The information and recommendations made available through our emails, newsletters, website and press releases (collectively referred to as the “Material”) by Sophic Capital Inc. (“Sophic” or “Company”) is for informational purposes only and shall not be used or construed as an offer to sell or be used as a solicitation of an offer to buy any services or securities. In accessing or consuming the Materials, you hereby acknowledge that any reliance upon any Materials shall be at your sole risk. In particular, none of the information provided in our monthly newsletter and emails or any other Material should be viewed as an invite, and/or induce or encourage any person to make any kind of investment decision. The recommendations and information provided in our Material are not tailored to the needs of particular persons and may not be appropriate for you depending on your financial position or investment goals or needs. You should apply your own judgment in making any use of the information provided in the Company’s Material, especially as the basis for any investment decisions. Securities or other investments referred to in the Materials may not be suitable for you and you should not make any kind of investment decision in relation to them without first obtaining independent investment advice from a qualified and registered investment advisor. You further agree that neither Sophic, its, directors, officers, shareholders, employees, affiliates consultants, and/or clients will be liable for any losses or liabilities that may be occasioned as a result of the information provided in any of the Material. By accessing Sophic’s website and signing up to receive the Company’s monthly newsletter or any other Material, you accept and agree to be bound by and comply with the terms and conditions set out herein. If you do not accept and agree to the terms, you should not use the Company’s website or accept the terms and conditions associated to the newsletter signup. Sophic is not registered as an adviser or dealer under the securities legislation of any jurisdiction of Canada or elsewhere and provides Material on behalf of its clients pursuant to an exemption from the registration requirements that is available in respect of generic advice. In no event will Sophic be responsible or liable to you or any other party for any damages of any kind arising out of or relating to the use of, misuse of and/or inability to use the Company’s website or Material. The information is directed only at persons resident in Canada. The Company’s Material or the information provided in the Material shall not in any form constitute as an offer or solicitation to anyone in the United States of America or any jurisdiction where such offer or solicitation is not authorized or to any person to whom it is unlawful to make such a solicitation. If you choose to access Sophic’s website and/or have signed up to receive the Company’s monthly newsletter or any other Material, you acknowledge that the information in the Material is intended for use by persons resident in Canada only. Sophic is not an investment advisor nor does it maintain any registrations as such, and Material provided by Sophic shall not be used to make investment decisions. Information provided in the Company’s Material is often opinionated and should be considered for information purposes only. No stock exchange or securities regulatory authority anywhere has approved or disapproved of the information contained herein. There is no express or implied solicitation to buy or sell securities. Sophic and/or its principals and employees may have positions in the stocks mentioned in the Company’s Material and may trade in the stocks mentioned in the Material. Do not consider buying or selling any stock without conducting your own due diligence and/or without obtaining independent investment advice from a qualified and registered investment advisor. The Company has not independently verified any of the data from third party sources referred to in the Material, including information provided by Sophic clients that are the subject of the report, or ascertained the underlying assumptions relied upon by such sources. The Company does not assume any responsibility for the accuracy or completeness of this information or for any failure by any such other persons to disclose events which may have occurred or may affect the significance or accuracy of any such information.
The Material may contain forward looking information. Forward-looking statements are frequently, but not always, identified by words such as “expects,” “anticipates,” “believes,” “intends,” “estimates,” “potential,” “possible,” “projects,” “plans,” and similar expressions, or statements that events, conditions or results “will,” “may,” “could,” or “should” occur or be achieved or their negatives or other comparable words and include, without limitation, statements regarding, projected revenue, income or earnings or other results of operations, strategy, plans, objectives, goals and targets, plans to increase market share or with respect to anticipated performance compared to competitors, product development and adoption by potential customers. These statements relate to future events and future performance. Forward-looking statements are based on opinions and assumptions as of the date made, and are subject to a variety of risks and other factors that could cause actual events/results to differ materially from these forward looking statements. There can be no assurance that such expectations will prove to be correct; these statements are no guarantee of future performance and involve known and unknown risks, uncertainties and other factors. Sophic provides no assurance as to future results, performance, or achievements and no representations are made that actual results achieved will be as indicated in the forward looking information. Nothing herein can be assumed or predicted, and you are strongly encouraged to learn more and seek independent advice before relying on any information presented.