Artificial intelligence is taking over almost every industry. The investment and financial industry is no exception. In Deloitte’s 2019 reportthe firm 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 loans. However, asset management is still in the early stages of digitization, according to the chief strategy officer and co-founder of Akros TechnologiesJin Chung.
Akros Technologies wants to disrupt the current asset management industry with its AI-driven asset management software platform that extracts market data for stocks. Akros just raised $2.3M from Z venture capitalthe corporate venture capital wholly owned by Z Holdingswhich also owns the Japanese messaging app Line and the Internet portal Yahoo Japan.
Akros intends to strengthen strategic ties with Z Holdings through a strategic investment, the startup said. The latest funding, which brings the total raised by Akros to $6.1 million since its inception in 2021, will help Akros scale its software platform and asset management products and increase its users, including local and global financial institutions and fintech companies.
The company is already in discussions with potential partners to expand its AI-based product, called portfolio management as a service, or PMaaS, an all-in-one portfolio management operating system. Chung explained to TechCrunch that PMaaS “enables B2B customers such as financial institutions, fintech startups and robo-advisors to launch their own exchange traded funds (ETFs) without having to build ETF teams and infrastructure.”
It added that it expects to secure more than five B2B customers in the first quarter of 2023.
The startup claims its AI-based portfolio management platform can reduce “the overall cost structure [of] traditional fund development’, including management fees and unnecessary fees involved in the investment process, by more than 80%. The equipment aims to maximize the financial management efficiency of data-driven ETFs and offer a portfolio management solution through PMaaS for Akros users to help them compete with global ETF institutions such as Vanguard or JPMorgan.
In August, Content Technologies launched Korean Pop Music, also known as K-pop, and Korea Entertainment ETF, on the NYSE Arca Exchange under the ticker KPOP, using Akros’ PMaaS solution to develop ETFs. In addition, Akros listed an AI-managed target income ETF called the Akros Monthly Payout ETF (ticker: MPAY) on the NYSE in May with monthly distributions at an annual target rate of 7%, according to the startup.
To build a set of investment strategies that reduce portfolio modeling costs and generate investment portfolio results, Akros applies a generative AI model based on solution transformerwhich predicts future actions through the consistency model, Chung said, adding that the company is also hiring GPT-3 natural language processing (NLP) for analyzing unstructured linguistic data.
Akros plans to continuously improve its engineering technologies, strengthening its business to disrupt the asset management market and attract new partners around the world, including Japan, Singapore and the US, co-founder and CEO Kyle Moon said in a statement.
Founded by CEO Moon, CSO Jin and Chief Marketing Officer 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 the NYSE. Prior to co-founding Akros, Gim had more than nine years of experience in the asset management industry; Chung did research work on Bayesian deep learning in autonomous 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 estimate when asked.