Artificial intelligence is invading almost every industry. The investment and finance industry is no exception. In Deloitte’s 2019 report, the company reveals that AI is transforming the financial ecosystem to reduce costs and make operations more efficient by providing automated insights and alternative data, analytics and risk management.
Technologies such as AI have digitized the financial sector, ranging from payments and remittances to lending. However, asset management is still in the nascent stage of digitalization, according to chief strategy officer and co-founder of Akros Technologies, Jin Chung.
Akros Technologies wants to disrupt the current asset management industry through its AI-based asset management software platform that leverages market data for stocks. Akros has just raised $2.3 million from Z Venture Capital, the venture capital wholly owned by Z Holdings, which also owns Japanese messaging app Line and Internet portal Yahoo Japan.
Akros intends to strengthen its strategic ties with Z Holdings through strategic investments, the startup said. The latest funding, which brings Akros’ total amount raised to $6.1 million since its inception in 2021, will help Akros scale its software platform and asset management products and grow its users, including local and global financial institutions and fintech companies.
The company is already in talks with potential partners to expand its AI-powered product called Portfolio Management as a Service, or PMaaS, an all-in-one operating system for portfolio management. Chung told TechCrunch that PMaaS “allows B2B customers such as financial institutions, fintech startups, and robo-advisors to launch their own exchange-traded funds (ETFs) without having to set up ETF teams and infrastructure.” .
He added that he plans to secure more than five B2B customers in the first quarter of 2023.
The startup says its AI-powered portfolio management platform can reduce “the overall cost structure [of] the development of traditional funds”, including management fees and unnecessary costs related to the investment process, by more than 80%. The team aims to maximize the financial management performance of data-driven ETFs and offer portfolio management solution via PMaaS to Akros users to help them compete with global ETF institutions like Vanguard or JPMorgan.
In August, Contents Technologies launched Korean Pop Music, also known as K-pop, and Korea Entertainment ETF, on the NYSE Arca Exchange under the symbol KPOP, using Akros’ PMaaS solution to develop ETFs. Additionally, Akros listed an AI-based target income ETF, called Akros Monthly Payout ETF (ticker: MPAY), on the NYSE in May with monthly distributions at a target annualized rate of 7%, according to the startup.
To build a multitude of investment strategies that reduce the cost of portfolio modeling and generate dozens of investment portfolios, Akros applies a generative AI model based on a decision transformer, which predicts future actions via the sequencing model, Chung said, adding that the company also employs GPT-3 Natural Language Processing (NLP) to analyze unstructured linguistic data.
Akros plans to continuously improve its engineering technology by strengthening its business to disrupt the asset management market and attract new partners around the world, including Japan, Singapore and the United States, said the co-founder and CEO Kyle Moon in a statement.
Founded by CEO Moon, CSO Jin and CMO Justin Gim, Akros employs seven people.
Moon previously worked for Qraft Technologies as Head of AI Research and CSO and had experience listing four ETFs on NYSE. Prior to co-founding Akros, Gim had over nine years of experience in the asset management industry; Chung has done research on Bayesian deep learning in self-driving cars at the Oxford Robotics Institute.
In March, Akros raised $3.75 million in funding from PeopleFund, a South Korean peer-to-peer lending platform. The company declined to provide its valuation when asked.
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