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“When people hear ‘financial AI (artificial intelligence),’ they easily imagine a service that quickly finds and organizes information. Of course, such functionality is important. However, what investors ultimately need more is the information required to determine ‘whether it is safe to invest in this product.’ We are using AI to make it easier to access the necessary information.”
Kim Seung-deok, CEO of Ascend, described the financial AI they are developing in this way. After establishing Ascend in April 2022, the company operated an AI quant-based hedge fund business in New York, USA. Kim (CEO), who liquidated the funds managed locally at the end of last year and returned to Korea, has been focusing on supplying financial AI solutions to financial institutional investors and manufacturing companies since March this year.
Ascend was recently selected as a partner company for NH NongHyup Bank’s open innovation program, ‘NH Open Business Hub.’ The company is collaborating with the goal of embedding an AI-based Exchange-Traded Fund (ETF) analysis service in NH NongHyup Bank’s ‘NH Olleh Bank’ app (application) by the end of this year.
Kim (CEO) holds a Certified Public Accountant qualification. While undergoing the accounting trainee process, he became interested in the asset management industry and worked as a quant trader while commuting between Singapore and Seoul. After founding Ascend in 2022, he established a hedge fund management company in the United States and managed funds for three years.
He stated, “While managing funds, I came into contact with various financial data and thought it would be useful to have a solution that could easily display this information, which led me to pivot the business,” adding, “I am developing an AI solution with the mindset of starting a new venture.”
Kim (CEO) explained that his three years of financial data analysis experience in New York became the starting point for ‘AIOS (AI Agent Operating System),’ which is currently under development. He is applying the experience gained from handling financial data that moves on a per-second basis and analyzing the relationship between market variables and price fluctuations to the development of AI solutions.
He also noted the environment where stock and ETF investments by retail investors are becoming active, yet it remains difficult for investors to find the information they are curious about. Kim (CEO) said, “For example, with a dividend ETF, one might want to know how much dividend would be received if 10 million won were invested, or how much loss could occur due to price drops, but existing apps only listed complex investment prospectuses or roughly one-year returns,” adding, “Our first-stage goal is for AI to organize the information investors want within 10 seconds.”
Ascend plans to expand the application scope of its AI solution to Wealth Management (WM) products at domestic banks and securities firms. In the long term, the company envisions expanding services to hyper-personalized financial counseling that considers individual asset holdings, investment tendencies, life cycles, and other factors.
Given that accuracy and regulatory compliance are crucial in financial AI, efforts are also being made to control hallucinations. Kim (CEO) stated, “As generative AI services have increased, there are many cases where people ask AI about financial issues, but hallucinations are truly fatal in the financial industry,” adding, “While finance is a field without definitive answers, mistakes must not be made, so we designed the system to apply rule-based protections for consumers when providing information via AI.”
Such control mechanisms are also being applied during the collaboration with NongHyup Bank. Approximately 28 guardrails have been established for regulatory compliance and financial consumer protection, and information generated by the AI is linked to original sources to enhance the reliability of results.
Kim (CEO) said, “I have felt that the more freedom given to AI, the more frequent hallucinations become,” adding, “We have decided to handle core areas through systematic rule-based control rather than leaving them to the AI model.”
Separately from collaborations with financial institutional investors, Ascend is also expanding its B2B solution business targeting domestic companies with high proportions of overseas exports and imports. Currently, the company is conducting a Proof of Concept (PoC) for a solution that assists in foreign exchange hedging decision-making during the commodity export-import process for one major domestic conglomerate.
Kim (CEO) stated, “Even if commodity prices move by just 1 percentage point, the transaction units are so large that hundreds of billions of won can be at stake,” adding, “These decisions have been made in a somewhat haphazard manner until now.” He further added, “We are providing signals regarding hedging ratios and timing based on market events, exchange rates, and volume data.”
The company plans to enhance predictive capabilities for commodity prices and exchange rates to expand its B2B customer base. It is also preparing services that reflect real-time news in financial models or analyze multiple documents to create investment review reports.
The ultimate goal Kim (CEO) envisions is not the financial AI service itself, but an ‘AI hedge fund’ he had conceived since the company’s inception. He stated, “My first entrepreneurial goal was to create an AI hedge fund capable of managing 1 trillion won with a small number of personnel,” adding, “While we are currently focusing on AI businesses for financial institutional investors and manufacturing, we will ensure that the data and decision-making capabilities accumulated during this process ultimately lead back to fund management.”
[MoneyToday Startup Media Platform Unicorn Factory]
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