As record-low interest rates eat into returns, banks are under pressure to retain and grow market share. TheLogicValue set out to help banks offer sound investment advice more efficiently.
TheLogicValue built a virtual assistant that draws on its wealth of investment and risk analysis data, providing rapid, useful responses to questions from financial advisors and investors.
900,000hypothetical questions answered on thousands of asset combinations
85%success rate that improves every day
5 secondsto answer complex queries that previously took three minutes
Business challenge story
Today’s investors are spoilt for choice. As record-low interest rates reduce returns on conventional savings accounts, more people are turning to alternative forms of investment. A whole host of companies have stepped up to tap into this fresh demand, offering everything from online-only to face-to-face investment management services. As providers jostle for market share, consumer expectations for service quality have soared.
In early 2018, European Union regulators introduced the Second Markets in Financial Instruments Directive (MiFID II), which outlaws the provision of free investment advice to ensure that recommendations are fair and unbiased. Many banks and investment management companies have absorbed much of the expense, rather than passing on the full price to consumers. This adds another cost to an industry where competition is intensifying and margins contracting. To succeed, financial institutions must evaluate companies and investment opportunities in a way that is quick and cost-effective, yet objective and compliant – no small challenge.
TheLogicValue provides a solution to this problem. Its sophisticated financial intelligence software analyzes companies, funds and bonds in a combined portfolio to generate risk assessments, reports and investment advice. Intelligent, objective insight from TheLogicValue helps both financial advisors and individual investors to make informed decisions. Integration with Thomson Reuters data enables the solution to report on assets in most countries across Europe, Asia and America.
Lorenzo Garcia, CEO and Co-founder of TheLogicValue, says: “Our software already had the power and sophistication to deliver expert analysis, risk prediction and scenario planning for complex financial portfolios. We were looking for a way to make this information more accessible, to make it easier for both financial advisors and private investors to take advantage of our services.”
“ With the IBM Cloud powering lightning-fast analysis, and IBM Watson Assistant delivering our sophisticated solution in an interactive, personable way, we are ready to serve our customers in an increasingly turbulent market. ”
— Lorenzo Garcia, CEO and Co-founder, TheLogicValue
A credit to their profession
To make its solution more accessible and user-friendly, TheLogicValue decided to create a virtual assistant capable of understanding customer questions, and delivering accurate answers based on information from its proprietary software.
TheLogicValue looked for an established provider to help with the project. Its search led it to join the Startup with IBM program and work with IBM to build a virtual agent called Julia using IBM Watson Assistant.
Garcia adds: “We chose to work with IBM based on its excellent service, and the distinguished reputation of its local team. IBM has extensive experience using Watson Assistant with banks and other financial services providers, so we knew IBM was the right provider for the job. We’re a young company with a small team, and the Startup with IBM program provided us with the help and resources we needed to grow, while saving vital capital. The IBM team were extremely enthusiastic, immediately helping solve any problems we raised and proactively offering suggestions for improvement.”
TheLogicValue utilized IBM Watson Natural Language Understanding, IBM Watson Knowledge Studio, Watson Assistant and IBM Watson Speech to Text to develop the AI assistant. Available as a browser application, the virtual assistant can interpret natural-language queries about individual customer portfolios and deliver findings from TheLogicValue’s financial intelligence software as personalized advice. The solution can be further customized – for example, only recommending investments that suit the investor’s risk appetite – and works in English and Spanish.
IBM Cloud delivers the IBM Watson APIs, and TheLogicValue is also moving its market data from another vendor to IBM Cloud. Garcia comments: “The IBM Cloud offers high performance and seamless scalability, enabling the virtual assistant to process high volumes of complex requests at peak times.”
“ A multi-country report that used to take 30 seconds to generate is now ready in only four seconds on the IBM Cloud – that’s a reduction of over 85 percent. ”
— Lorenzo Garcia, CEO and Co-founder, TheLogicValue
The virtual financial advisor can solve 900,000 hypothetical questions, based on 1,500 assets, 35,000 funds, 1,200 pension plans, 1,000 exchange-traded funds and 15,000 bonds. The solution currently answers 85 percent of questions successfully, and TheLogicValue continues to refine its algorithms using machine-learning capabilities.
With the help of Julia, financial advisors and investors have quick and easy access to research and analysis of their portfolios. Insight from the virtual assistant helps them make astute investment decisions, without having to interpret complex reports. The solution is currently being used in projects with two banks in Spain.
“Our virtual assistant, built on IBM Watson and IBM Cloud, puts powerful financial insight into the hands of investors and financial advisors,” remarks Garcia. “The user-friendly interface makes it easier for investors to keep a closer eye on their portfolios, while its rapid insight helps financial advisors provide more responsive service to clients.”
As well as providing insight that financial advisors could not access without in-depth analysis, the solution also accelerates time-consuming desk research. Garcia adds: “Leveraging the speed of the IBM Cloud, we accelerate our customers’ everyday investigations, as well as the more complex calculations. Using the virtual advisor speeds up simple inquiries by 50 percent, and complex searches by 95 percent.
A solution that pays dividends
Migrating to the IBM Cloud offered TheLogicValue more powerful computing resources, accelerating response times for the company’s software to deliver insights even faster. Complex questions are divided into smaller queries that are run in parallel, so that users enjoy rapid results.
“The power of the IBM Cloud is a great advantage for us,” Garcia elaborates. “We often need to generate reports on multiple sectors and countries, which require a lot of compute power and could take a long time. But the IBM Cloud makes short work of it. A multi-country report that used to take 30 seconds to generate is now ready in only four seconds on the IBM Cloud. That’s a reduction of over 85 percent. Equally, some complex calculations that previously used to take three minutes are now answered in five seconds – a 95 percent improvement.
“The scalability of the cloud also means we can expand easily to meet peaks in demand and grow capacity without having to acquire and install more servers.”
Garcia concludes: “Working with IBM has given us a huge reputational boost. Everything in the financial services industry is about trust and reputation, and for a startup, this takes time. But our connection to IBM shows financial service companies that we are worth taking seriously.
“With the IBM Cloud powering lightning-fast analysis, and IBM Watson Assistant delivering our sophisticated solution in an interactive, personable way, we are ready to serve our customers in an increasingly turbulent market.”
TheLogicValue offers an application that values listed businesses, investment funds and fixed income, helping investors, financial advisors and organizations to make smarter investment decisions. The company is headquartered in Valencia, Spain.
Take the next step
To learn more about IBM Watson® Assistant or IBM Cloud™, please contact your IBM representative or IBM Business Partner, or visit the following websites: ibm.com/watson/ai-assistant/ and ibm.com/cloud/