T
HEY HAVE NAMES SUCH AS HARDBACON, Ambo, Wealthica and Covera. These are among the dozens of startups across the country that are sparking a revolution in the financial technology sector (a.k.a. fintech). Their secret weapon?
Algorithms, paired with financial analysis. Their goal? To enable individuals to build stock portfolios on their own or find the insurance policy that best suits their needs. But algorithms are by no means exclusive to the world of finance. They shape vast areas of modern life, influencing our habits and telling us what to read, watch or buy. One thing is for sure, however: while you probably don’t know much about them, they sure know a lot about you.
Direct investment “A financial adviser can evaluate a portfolio to determine the degree of diversification and exposure to risk,” says Julien Brault, CEO of Quebec startup Hardbacon. “What we can do is transform that know-how into algorithmic code.” Founded in 2016, the company has launched an application that “makes it easy for anyone to analyze investment portfolios and invest in the stock market.”
Ambo Technology is part of the same new generation of algo-
rithmic trading soſtware enterprises. The firm’s president and cofounder, Pascal Leblanc, combined mathematical models with investment strategies to develop artificial intelligence-based soſt- ware that optimizes these strategies. The funds invested through the soſtware generated returns of 87% in 2016 and roughly 125% in 2017. “There is no human intervention involved,” says Leblanc. “Better still, the soſtware can carry out transactions 24/7.” It’s a similar story at Hardbacon, which is geared toward indepen- dent investors. “We cut out financial middlemen to give infor- mation directly to investors,” says Brault. More and more, portfolio management decisions are made
using algorithms developed by programmers, who are growing in ranks. Today, a computer science graduate is just as comfort- able in the financial industry as a financial expert. Croesus, which created a software platform for portfolio managers at large financial institutions, is no different: more than a quarter of its 175 employees are computer engineers or programmers. “They are teamed up with our financial analysts,” says Patrick Chassé, the company’s director of soſtware development. “One group creates the financial algorithm rules, while the other inte- grates them into our soſtware.”
FEBRUARY/MARCH 2018 | CPA MAGAZINE | 39
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