Developing a finance application using IBM Cloud

5 min read

By: Twana Daniel

IBM Cloud offers a collection of financial services targeted at Financial Technology – FinTech.

“What would happen to my stock portfolio if the Dollar drops 5{07c2b926d154bd5dc241f595a572d3349d41d98f2484798a4a616f4fafe1ebc0} against the Euro? or if the gold price goes up by 1.1{07c2b926d154bd5dc241f595a572d3349d41d98f2484798a4a616f4fafe1ebc0}?” If you are a developer in the Finance industry or a financial analyst, or if you simply own stocks you may be asking yourself the question. How could modern technologies and services help answer this question?

IBM Cloud offers a collection of financial services targeted at Financial Technology – FinTech. With these services, developers have the ability to build on customer insights, regulatory compliance analytics, security, privacy and compliance readiness, saving time on development and testing.

Investment Insights for Asset Managers is a sample application that uses IBM Financial services and IBM Watson services. The application is a modern portfolio manager that provides real-time insights into how news around the world can impact a given portfolio. It showcases what can be done with the financial services when combined with the Watson services. More precisely the application uses a combination of Watson Discovery NewsInvestment PortfolioPredictive Market Scenarios and Simulated Instrument Analytics services to achieve its goal.

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  • The Investment Portfolio provides a data store for portfolio holdings, designed for the financial trade industry.
  • Watson Discovery gives the application access to a news data set. The data set is updated continuously and has approximately 300,000 new articles and blogs in the English language added daily. 
  • The Predictive Market Scenarios and the Simulated Instrument Analytics services compute a projected impact on a selected portfolio holdings based on a shock value calculated. 

Risk Analysis

The application analyzes a stock portfolio in regards to various risk factors to a given portfolio. Risk Factors include things like currency fluctuations or changes in the price of oil and gold. Using Watson Discovery service, the application retrieves current news articles related to the risk factors and give the user insights into changes in these factors.

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Watson discovery gives us a sentiment analysis like positive, negative or neutral and scoring for each sentiment, with this information we then create a logical shock value that is passed into the Predictive Market Scenarios service. 

The flow goes as:

  1. The user selects a risk factor to consider;
  2. With Watson Discovery, the application finds recent and most relevant news articles about the risk factor like gold price, Oil Price and S&P500;  Watson Discovery gives us a sentiment analysis and scoring for each sentiment (positive, negative or neutral). The sentiment analysis is part of the enrichments provided by the Watson Discovery News dataset;
  3. The application computes a shock value based on the sentiment of the articles.
  4. Then it calls the Predictive Market Scenarios service to create conditional scenarios to model how a given change to a subset of factors the broader set of market factors are expected to evolve;
  5. Finally, it computes analytics on the portfolio stocks under the given scenarios.
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If you want to try the application, it is deployed at http://investment-insights-am.mybluemix.net

Try the live app

You can also find the application source code in the GitHub repository together with a toolchain to automatically deploy your own copy of the application.

View application code

Invest wisely

The sample Investment Insights for Asset Managers application provides a good introduction to the capabilities of the services it uses. The app could be further expanded with additional features such as:

  • Allow users to enter their portfolio stocks to get insight into how news can impact their real stocks;
  • Enable users to see history of stocks where there have been falls or raises;
  • Provide more in depth and fine tune news articles; 
  • Create been calculated shock value to out more accurate results; 
  • Add other new services like AppID, data science services, and IBM graph service.
  • Add other 3rd party services.

For more detailed deployment steps refer the GitHub repo: https://github.com/IBM-Bluemix/investment-insights-for-asset-managers

Watch out for more blog articles talking about each of the areas in more depth including Financial services, Watson Discovery, Application flow, security, and storage. 

If you have any questions or want to contribute ideas and features to the application, then click on this link and create an issue on GitHub. We will get back to you shortly. Happy Coding!

 

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