Wealth creation through AI: A new breed of tech businesses transforming financial sector.

Artificial Intelligence is en vogue, and yet, meaningful applications are only now emerging from the vast amount of hype that surrounds machine learning.

The real value of AI lies in scaling up user experiences while ensuring they remain personalised and rewarding. This is particularly relevant for financial services where clients demand high quality service, tailored advice and best execution.

No wonder, large financial institutions are excited about AI and keen to explore its potential in data collection, analysis, process automation and personalisation.

Big possibility brings in even bigger challenges, and many banks, brokerages and wealth managers are simply not geared towards building cutting-edge technology and managing its implementation. Top developer talent in AI is tough to find and retain. And current development cycles are too long for fast moving financial market ..

So, it comes as no surprise that financial institutions are looking to partner with innovative fintechNSE 0.00 % startups in order to leverage the power of AI and other innovative technologies. The new industry mantra is “collaborate to accumulate”.

One such startup is Arkera. Founded in 2015 and based in London and NYC, the company uses AI and deep learning to enable financial institutions to acquire new clients, stop client attrition and raise their activity levels. Their leadership team is ex-DE Shaw, Citadel, Goldman Sachs and Google.

They introduced a “showcase” app recently in the US and UK app store, allowing investors to discover new and exciting investment opportunities in Exchange Traded Fund (ETF) products. Arkera analyses more than 100,000 articles daily, uses NLP technologies to contextualise them and connect them with 2,000 different ETFs, a process that would be impossible for any human to carry out.

Arkera co-CEO Vinit Sahni emphasises the importance of storytelling. Sahni says: “Self-directed investors buy into stories. They prefer to look at big ideas, narratives and news rather than bottom-up fundamentals. We help our institutional clients tap into that in order to drive growth.”

So, what does storytelling have to do with AI? Sahni explains, “AI can process huge amount of data, and when you inject financial domain knowledge into this process, you can empower self-directed investors to make exciting investment decisions by connecting personalised content to investment products in a way that’s automated and therefore scalable.”

This kind of automation is the holy grail for financial institutions since it enables them to scale distribution in a way that was previously impossible. And it works particularly well for ETFs and other mass market financial products. Combined with “personalisation” using Arkera’s proprietary deep learning technologies and a sophisticated recommendation model, the user experience mimics that of Spotify, Netflix and Amazon, making it very difficult for self-directed investors to walk away.