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Augmenting Financial Intelligence & AI Transformation

Updated: Sep 25

Semantic Brain was founded with the intention of augmenting Human Intelligence, by harnessing the power of AI and Big Data. Our primary goal is to increase human productivity as it relates to performing intelligent tasks, by an order of magnitude; using enhanced AI / Machine to Human feedback loop(s).


Accomplishments

Accomplishments thus far include

  1. Articulating a clear vision and focus that can be simply stated as

  2. Investor + AI > Investor or AI

  3. Proving our AI expertise and our ability to deliver useful solutions in areas of Investing, Trading and Wealth Management

  4. Future Top Movers is a Semantic Brain service that identifies stocks that are likely to have significant price swings (up or down) and are expected to change price by at least 5% within five(5) trading days. Our "Future Top Movers" functionality delivered 100% Precision in the first month in production.

  5. Price Change Direction prediction is another Semantic Brain service that predicts the direction of aggregate stock price movement over the short-term (Intraday and up to 20 days). These predictions have also proven to be very accurate at the Portfolio level (when back tested with 10 years of data).

  6. We have and are continuing to develop many Prediction services and have built a common Data and Machine Learning (MLOps) pipeline. This will help us accelerate the development of new Prediction services and scale support.

  7. Demonstrating the versatility of the Conversational Interface (similar to Chatbots). Asperios (Semantic Brain product) users can obtain any obtain any information they need by typing an instruction (See video for detail). This conversational interface enables Asperios to

  8. Deliver 1000x query capabilities compared other Financial applications leveraging traditional Graphical User Interfaces

  9. Provide comprehensive snapshots that enable quick triage within 1/10th the time

Note: FAML (Financial Analysis and Management Language) enable users to interactively or programmatically interact with Asperios using text input.


We are extremely proud of our accomplishments, and offer Enterprises / Retail Investors the ability select from an a la carte of services and individual components. The services and components stated above were developed using common Architecture, Design Patterns and Framework, and they:

  • From an Enterprise perspective deliver, an Architecture and a Framework for the "The Bionic Company" (a term defined by Boston Consulting Group)

  • From an Individual viewpoint deliver a Design Pattern for "Augmented Intelligence" (a term defined by Gartner).


Design Philosophy & Patterns


Our goal was to develop an Architecture and a Framework that can ensure Human + AI remain far superior to Human or AI (even if / after Artificial General Intelligence and Artificial Super Intelligence become a reality). We then set out to leverage this Architecture and Framework to develop an application that delivers optimum results in Investing / Trading / Wealth Management.


It was clear from the onset that we needed to create an effective feedback loop between Human / Investor and AI. It was also obvious that Human / Investor and AI need to focus on what they were best at.


Humanistic Intelligence by Steve Mann on syncedreview.com 2017

Semantic Brain's design pattern ended up partially overlapping 2 of the 3 design patterns defined by Steve Mann in an article titled "A Brief Introduction to Humanistic Intelligence: The Symbiotic Future of Machine and Human" published in Synced. We think it is reasonable to assume that the ultimate solution as per Steve Mann is a mediated solution where the computer completely envelops the human.


For commercial and technical reasons Semantic Brain has created a design pattern that incorporates elements of augmentation and mediation. The rationale for doing so include:

  • Our customers already have existing Algos and Software, and we want to provide them the ability to easily integrate them with Asperios.

  • Semantic Brain / Asperios plans to add more mediation capabilities over time (as opposed to all at once).

  • AI in general or Asperios in particular, may never reach a point where it can process all content.

Note: Humanistic Intelligence was designed for Wearable Computing / Augmented Reality. Whereas, Asperios was designed for Research and Analysis (especially as it relates to Investing)


Investor vs. AI

What can AI do better than humans? What can humans do that AI can't? What should humans focus on?


AI / Machine Strengths

Seemingly obvious observation is AI / Computers are much better than Humans at processing large volumes of data and performing numerous calculations. They tend to perform these tasks much more accurately, faster and cost effectively.


However, the recent advances in AI enable us to do a lot more. AI has become very good at learning and recognizing patterns. This is especially true for multi-dimensional quantitative data, and it is better than Humans when the number of dimensions exceed 2 or 3. Semantic Brain has successfully leveraged this capability to make highly accurate / high precision predictions

  • Over 2 to 20 trading days based on EOD (End of Day) historical data

  • Intraday based on Intraday / Real-time Data

Asperios is able to predict both magnitude and direction. In certain scenarios (e.g., with magnitude prediction) it is able to make these predictions using only technical data (asset price, volume and related technical indicators) as input. Under other circumstances (e.g., price direction prediction) it uses both technical and fundamental (e.g., earnings) data.


Investor / Advisor / Human Strengths

AI as it currently stands does not understand business, economics, or natural language. However, it is able to process natural language, assess sentiment, summarize and present its findings. Furthermore, it is able to collect, filter and sort business and economic data optimally to investors.


In summary, AI is capable of making tactical investment decisions (< 20 trading days) within minimal / limited human input and can provide decision support when making strategic investment decisions. Humans can increase accuracy of AI predictions by incorporating market trends (bull vs. bear), sector and company strategic outlook insights.


Customer Needs

We initially tried to dissect the market into Retail vs. Institutional, Passive Investor vs. Active Trader, etc. However, upon further investigation it became clear that there were many common concerns.


Common Challenges

Time is a common problem for both Retail and Institutional Investors. Asperios is designed to help optimize effort on the following time consuming tasks.

  1. Scanning the markets. There are 53K companies listed on the world federation exchange.

  2. Monitoring watchlists.

  3. Managing portfolios. This includes rebalancing assets.

  4. Time spent collecting quantitative data and performing analysis

Future Top Movers, Price Change Magnitude, Price Change Direction are common solutions that apply to both Retail and Institutional investing.


Retail vs. Institutional Investor

Semantic Brain's approach to product management involves developing common technologies that can be subsequently packaged and priced differently to meet the needs of retail and institutional investors. Future Top Movers, Price Change Magnitude, Price Change Direction are examples of prediction services that can be custom packaged and priced.


Institutional packaging and pricing of Future Top Movers, Price Change Magnitude, Price Change Direction prediction services and historical alerts (e.g., identify significant price / volume change and earnings events that have already occured) differ from retail use. Institutional examples include

  • Future Top Movers, Price Change Magnitude and Price Change Direction are packaged to help investors maximize profitability

  • Daily / Intraday / Real-time historical alerts help further maximize profitability. Intraday and Real-time alerts are priced at a premium.

  • Real-time market data is available at a premium

  • Derivative analysis capabilities are also available at a premium.

In contrast, Future Top Movers, Price Change Magnitude and Price Change Direction are packaged and presented to retail investor as tools for identifying and mitigating risk.


Our Architecture


The following architecture diagram identifies key components of our product Asperios at a high level. The solution is made up of multiple modular components, and customers have the pick choose what they want or alternately integrate their and 3rd party products into Semantic Brain framework.


It is important to note that Predictions and Alerts enable the mediation Design Pattern articulated earlier in this article.


Summary & Next Steps

Semantic Brain on a quest to prove Investor + AI > Investor or AI has successfully developed

  1. Predictive Analytics services that forecast magnitude and direction of price

  2. One of our Predictive Analytics services, Future Top Movers made hundreds of predictions and demonstrated 100% Precision during its first month in production

  3. A Conversational Interface that can help an Investor access almost any information required to make decisions.

While commercializing the Predictive Analytics and Conversational Interface capabilities remain a priority for Semantic Brain, we also have a broader and more ambitious vision to

  1. Transform enterprises using Semantic Brain Architecture and Framework into "The Bionic Company" (as defined by Boston Consulting Group)

  2. Evolve humans individually using Semantic Brain design patterns and solutions to develop Augmented Intelligence (as defined by Gartner)

We believe that our Architecture, Design Patterns and Framework can help Financial Institutions successfully accelerate their AI / Digital transformation; and are looking to partner with Customers, Data / Analytics / Software vendors, and create some Open Standards to make this dream a reality.


Reference

Delivering 1000x Investment Analysis - https://youtu.be/fHAQckaTLvE

Intelligent Micro Portfolios: Can AI Predict Stock Prices? - https://www.semanticbrain.net/post/intelligent-micro-portfolios-can-ai-predict-stock-prices

The Bionic Company - https://www.bcg.com/en-ca/capabilities/digital-technology-data/bionic-company

Humanistic Intelligence - https://syncedreview.com/2017/04/17/a-brief-introduction-to-humanistic-intelligence-the-symbiotic-future-of-machine-and-human/



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