Technical white paper on an AI platform funded by the Monetary Authority of Singapore that resolves challenges in ESG investing, including data interoperability
SINGAPORE, Feb. 23, 2023 /PRNewswire/ -- Nexus FrontierTech ("Nexus") and APS Asset Management ("APS") have released a technical white paper written under the Monetary Authority of Singapore's ("MAS") Financial Sector Technology and Innovation ("FSTI") Proof-of-Concept ("POC") scheme, demonstrating the technological success and commercial viability of an artificial intelligence ("AI") platform for asset management.
The paper details a unique collaboration and commercial innovation among investment managers, ESG experts, and technology providers across Singapore and China. The results of this partnership are newly discovered insights into innovating AI-driven data analysis into investment processes, and the award-winning Environmental, Social, and Governance (ESG) data platform, ANAFES (APS-Nexus AI-Fundamental ESG System).
ANAFES taps on new and advanced technologies to resolve the challenges of ESG investing in China, such as the lack of transparency, inconsistent reporting standards, and available ESG data systems being scattered, manual, and not integrated into asset management operations. ANAFES also successfully demonstrated interoperability between an ESG framework such as GRI with an asset manager's in-house framework.
Nexus and APS developed three sets of AI models embedded in ANAFES, with accuracy rates averaging 80%, fundamentally changing the ease of use of ESG data for businesses:
i) the ESG data parser allows users to customise accurately extracted ESG data into their own investment frameworks, rather than relying on ESG scores from potentially less relevant and opaque one-size-fits-all global service providers
ii) the News Monitoring function allows users to automatically perform sentiment analysis based on news aggregated from both publicly available and subscription-based sources, and
iii) the Investigative AI function conducts deeper analysis into important data categories like footnotes and business terms in company annual reports as well as other written investor communications. This function also maps out senior corporate figures' key related parties and factors these relationships into each target company's ESG scoring
Functioning as a central portal that manages all ESG frameworks, data, and news efficiently and accurately on a single dashboard, ANAFES helps portfolio managers and analysts visualise, benchmark, and analyse company ESG performances across industries and geographies, as well as standardising an asset manager's integration of ESG into their investment process.
From a productivity standpoint, the automation of various tedious, manual research workflows is expected to increase the productivity of investment analysts by 50-70%, freeing up more time for them to concentrate on higher value tasks and functions, such as fundamental analysis.
ANAFES unlocks the potential for a large number of small and mid-sized asset managers with limited resources to accelerate the implementation of ESG investing via their own manager-defined approach. Although the initial focus is on China, ANAFES' AI-native capabilities can easily scale into other markets. This would augment the capabilities of asset managers and researchers in the region.
By releasing this paper, Nexus and APS are optimistic that the experiences and end products of this project will add to the growing pool of intellectual capital and capabilities for Sustainable Finance, as well as spur greater dialogue and collaboration in ESG data interoperability.
The full paper can be accessed here: https://nexusfrontier.tech/resources/ai-fundamental-esg-scoring-platform/
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About APS Asset Management:
APS Asset Management was founded in 1995 by our Chief Investment Officer, Wong Kok Hoi, to specialize in public equity investments, employ investigative research and independent thinking, and serve global institutional, long-term capital allocators. Headquartered in Singapore with three offices in China, we are one of the few home-grown, independent, China-focused boutiques with a track record spanning multiple decades. APS' longevity through several market cycles has strengthened our investment memory and organizational robustness which has helped to better manoeuvre clients' investments in various and challenging market environments.
Our approach of utilizing deep fundamental, forensic and investigative analysis to construct alpha-diversified portfolios is executed in long-only and long-short China public equity offerings. Emphasizing the importance of alignment of interests, APS is internally owned and firm and employee capital constitute a considerable portion of assets under management. Our covenant to clients and core values have never wavered - differentiated China research, conviction in our ideas, and the endless pursuit of sustainable alpha.
APS is regulated by authorities around the world including the Monetary Authority of Singapore, the U.S. Securities and Exchange Commission, and the Ontario Securities Commission. Our global client base comprises pension plan sponsors, sovereign wealth funds, endowments, foundations, and other institutional long-term minded allocators.
About MAS FSTI Proof-of-Concept Grant
The Monetary Authority of Singapore (MAS) is Singapore's central bank and integrated financial regulator. MAS also works with the financial industry to develop Singapore as a dynamic international financial centre.
The MAS Financial Sector Technology and Innovation (FSTI) Proof of Concept (POC) scheme provides funding support for experimentation, development and dissemination of nascent innovative technologies in the financial services sector.
About Nexus FrontierTech:
Nexus FrontierTech is a technology company that develops AI and digital transformation solutions for businesses, with a specialisation in finance. Our proprietary platform powers modular AI components that automate data-driven processes, extract valuable insights from unstructured data, and improve decision-making through predictive analytics. We help organisations integrate AI into their operations, leverage data to drive business growth, and stay ahead in a rapidly changing digital landscape.
Nexus recognises the increasingly critical importance of transparent, accurate and comparable environmental, social and governance (ESG) data and analytics for the financial industry. As the trusted and preferred partner in the transition to sustainable finance for several large banks, Nexus is committed to bringing SME Asset Managers affordable cleaned-data, analytics and research management solutions, which allow customers to use ESG data as the backbone of their investment processes and maximise their revenue growth opportunities by leveraging AI as their competitive edge. The success of the ESG Platform was recognised at the Global Fintech Hackcelerator 2021. Nexus' submission of the ESG Platform solution was shortlisted as a Finalist in the Local Programme and scored above 60% by the experts judging panel, and received the prestigious Monetary Authority of Singapore grant.