Fintech and Kensho

When we talk about Fintech, we talk about unemployment and lay off.

Computer programs constitute the fundament of Fintech. Fintech is not a new thing, just considering the ATM machine and voice service when you call your bank customer service. Now the technology improves. It is said that programs can help financial institutions scrape the data and automatically generate financial analysis report. One step away from recommending the stocks or investment portfolios (actually some preliminary AI programs can do that, if it is in compliance and legal).

We have heard too many stories about tough life of employees in the investment bank on wall street. Over 100 hours a week can no longer surprise people. It’s a typical life style, especially you are in a well-known intuitions- long working hours without enough sleep become your honor badge.

The buyer side employees are also by no means easy. The pressure of the market and endless analysis towards the most updated market fluctuation makes everyone exhausted, from equity research analysts, traders, to portfolio managers. All people suffers. Their lives are engulfed by numbers, data, charts, quantitative analysis, and breaking news that stir up the market.

Kensho is a Fintech company that stands out from many with similar business. Since finance industry highly relied on data and information, application of AI is much easier than other areas(like entertainment and arts). Kensho received investment from Goldman Sachs and is serving for Goldman in automatically generating analysis report, and give information that highly related to the key wards–at this point, you can consider it as a more smart google engine for professionals in financial industry. Actually Kensho hired machine-learning experts who worked for Google’s library project to improve the search result. Let’s back to the investment. Once Goldman’s employees located their search range, they can narrow it down to make the result to more specific

Investment target-usually the energy stocks and commodities and currencies. The Kensho’s system can provide them dozens of major assets in the world, from Germany stocks, Australian dollars, and varieties of crude oil. If the employees go on and click “generate the research”,

They can get charts to show how the investment targets’ trend and performance, along with the keyword event ( the employees just input for their original search) in the timeline. The Kensho even constructed an optimal portfolio as suggestions to the investors. For my perspective, it’s easy to understand why the smart system applies mostly in energy and commodities: the investment logic in these investment targets are much simple than the individual’s stocks in S&P 500 or Nasdaq.At the early stage, the Fintech company should avoid too much complexity and uncertainties.

However, experts in machine-learning and text-mining may say that this is only tricks and children’s toy invented by some geeks. I agree. As an individual investor, I heard many beautiful stories and experiences even more that I don’t believe Goldman Sachs put all their chips on this “smart system”.(in fact, they didn’t. They treated Kensho as a necessary experiment). But one thing is true: Fintech relieve analyst from heavy and repetitive labor. A portfolio manager doesn’t need as many analysts as before, when he makes decisions. Good news for boss but many financial professionals already sense the coldness for those fancy technologies. They are no longer be needed. How stock brokers and traders lost their jobs because of the technology is a story just happened not too long ago.

But the kensho’s ambitions is far more than saving labor costs. They expect a strong AI in the future, an AI that smart enough to predict human’s needs and demand. Nadler, boss of Kensho and also a Harvard PhD majored economy, said no matter how, things don’t happen so fast. Within the next dozen years, computer program can’t be as smart as human, but only do some replacement work that gives human some economic benefits.

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