AnalytixInsight AI/ML Financial Services Platform

From Sophic Capital Research team:

AnalytixInsight Recap

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.

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