AI's arrival Navigating Deals with Intelligence, Diligence and Data

[Music] hi it's me again uh so welcome back to our session again around AI which is the theme of today so today we're going to be focused more on the D diligence side around how AI is being applied in financial services specifically due diligence where we look at um topics such as sustainability as well as the private markets uh Financial crime and so forth so um as a starting point perhaps Dickens you can uh start off with a introduction about yourself well sa and thank you so much Jessica and all of the team at ADF W for inviting me onto this panel uh my name is Dick and Johnston I'm the founder and CEO of Themis which is an award-winning digital Financial crime platform based here in adgm so really we're bringing the very latest in AI Tech to Abu Dhabi to help UA businesses automate and streamline their due diligence on their clients suppliers third parties and investors and finally we're working very closely with the various government bodies and Regulators here to really showcase the UAE as a global leader in the AML CTF space not just here but also regionally and internationally as well thank you and John uh hello thanks for having me uh my name is John Abbott uh in terms of background I spent the first 10 years of my career at JPM moring working in the uh m&a group in New York and then in sou Paulo I then spent 10 years running a NASDAQ listed consumer internet business uh where I got to learn about technology and then sort of combined both uh started a uh alternative asset uh Marketplace uh about 3 years ago and that led to us developing some interesting AI tools uh that uh automate um Financial reports that business is is Bullpen thank you and odish hello um I'm adish I'm the founder and CEO of shisen uh shisen is an decision intelligence platform for instit investors to understand climate and its impact on their portfolios in their Net Zero transition Journey um hi I'm Mias satar I'm a growth Ventures partner at bny for those not familiar with bny it's a global firm that really serves as critical Market infrastructure for Capital markets and financial markets more broadly uh to give you a quick sense of scale uh we custody about $50 trillion uh of financial assets it's a one fifth of all the world's Financial assets flow through bny's platform in some way shape or form uh we are number one in US government securities uh clearing and settlement uh we are the world's leading uh collateral manager so just a a ton of sort of data um flowing through our platform when it comes to financial markets and capital markets more broadly uh growth Ventures is a team within bny that builds buys and invests in new technologies and commercializes new technologies that are adjacent to our Core Business um so of course this topic is super relevant to some of the things uh me and the team are working on and hi good morning I am Hassan co-founder and CEO of integrated data intelligence uh IDI so IDI is a uh startup right here in Abu Dhabi set to transform the way private markets private Market investing works uh we are here to apply AI to the full life cycle of private Market investing and uh we believe that this is really going to transform the entire uh process from uh deal sourcing all the way to portfolio management and the most interesting thing about IDE is that we are building this full stack technology right here in Abu Dhabi thank you for the the introduction so Deacon we'll start with you um so you mentioned you're in financial crime right and why is Du diligence important for today's investment and start startup ecosystem and where does AI come in in here well thank you um so all uh Founders startups and investors here will have both legal and regulatory requirements to do due diligence on their investors clients suppliers and third parties and at theme is we can help with that but much more importantly we are also protecting our clients from the reputational and Financial Risk that they run from any unwanted associations with criminality and uh organized crime so we work with lots of investors here in the UAE to automate and streamline their due diligence both on their um source of funds so making sure they've got good clean reputable money coming into their funds but also on their outbound Capital flows so if they are making any investments into private companies really kicking the tires to make sure that there are no skeletons in the closet that are going to come out and burn them in five years time let's take a recent example of a very well-known fast fashioned business um they recently lost over a billion dollars in their valuation in just four years and why was that that was because a International Paper published a story around uh alleged Force labor conditions in their clothing factories and they never recovered from that reputational damage caused in fact not only did they lose a billion dollars on their valuation um but they currently have um aund million lawsuit um against the owners and operators from some very angry investors so how can AI help that well really criminals themselves are using increasingly sophisticated technology to further their own illicit activities um and actually we recently published a paper with adgm and the national AML and CTF committee exploring things like how criminals are using invoice fraud deep fakes to trick people and businesses into giving them millions of dollars that they will never ever see again so we need to stay on top of that criminal behavior and really AI allows us to do that by paing millions and millions of data points together so that we can really clearly and easily identify that risk and ultimately what we're then talking about is making better faster safer decisions so really this is an enabler of good business here in the UAE thank you for that and uh John so how have you uh utilized AI technology in the private Equity Market space so we we have a private Equity uh Marketplace uh focusing on private Equity syndications these syndications uh are done within very short periods of time and so what we started uh developing was one uh a a way to automate our our report so we'd spend maybe on average about six and a half hours um reviewing uh deal information and preparing a a standard sort of 68 page report uh through the use of AI we've got that down to 30 minutes so it's two or three minutes for the report to be generated another 25 minutes to to proof it and then it's it's sort of client ready so that was a big um productivity gain and there's the due diligence as well so typically our deals have hundreds if not thousands of pages of information it's very difficult to get through it all and so through the AI we can essentially address any any question filter any issue up front it helps the screening process and then once you actually have investors engaged you can get uh responses in in real time thank you and aish so in the context of sustainability um how can AI tools help in making better investment decisions that align with both profitability and environmental goals yeah so you need to uh consider the first part that what are investors actually looking for when they are trying to integrate sustainability or climate into investment decisions one is they're looking for answers to what is the financial impact of climate on their investment performance what are the fundamental factors that drive climate perform performance of their individual Investments and what is the impact of their Capital allocation decision on the climate and to do that one is to ensure that the quality of data that you have especially climate data which is highly unstructured and fragmented you you're able to you know make sense of that data in the context of your investment thesis and to and also with AI you can create indepth and comprehensive fundamental analysis to understand those factors that drive climate performance and build correlation with the financial uh Financial indicators of your Investments for instance if you're evaluating a company that plans to transition to Net Zero by 203 let's say so they'll require a lot of capital expenditure in transforming their operations and the entire value chain that could impact their distribution their manufacturing and the output which could you know impact their revenues profits in the short term where they could have you know done business as usual and maybe could have made more profits but in the long run it could help um them stay more competitive in the industry so with AI you can understand all of this dat data and connect it to the financial data right now uh investment teams uh spend anywhere investment and climate teams spend anywhere from 6 to 9 months just to collect data and report it in their sustainability reports but the output the result is not uh you know fundamental level integration into investment decisions so with AI you can you know uh understand and map and take actions just by taking climate as an important factor in the economy and not just because you want to have a good impact on the environment which is all which is what we want but you also need to you know integrate it because you want to maintain or improve your investment performance thank you and Meda in terms of bny you know for asset owners asset managers and other investors in the ecosystem um how have they been using your platform and how does AI support that decision making and what other the areas do you see AI can add value in this aspect yeah I think one of the products or platforms we're working on uh at growth Ventures which we're super excited about is a data analytics and AI platform for financial markets participants um and this is already sitting on sort of $50 trillion doar of what we call assets under data management so there's a huge Data Corpus behind it but how do you make sense of that data if you're an investor and the key value ad here or I'll mention a couple of key value ads is um let's say you're an LP invested across multiple asset classes uh public equities uh public debt but also private Equity private credit real estate venture capital um the data that's coming in that you need to analyze in order to make smart decisions or to even track your performance intelligently is coming to you in multiple different forms your GPS are sending you PDFs and emails uh your team is modeling on Excel you've got a public data feed from Bloomberg or msci how are you actually able to pull all that data together out of these various structured and unstructured data sources and create a comprehensive View and actually make sure that data is consistent and accessible so we're already using AI to extract that data from multiple different data sources um the other piece where it's already being used is data classification so again the same piece of data might be referred to in a different way across all of these different data sources uh when it actually is referring to the same type of underlying data so uh it sounds a little bit dry but this sort of classification of metadata data is super super important to be able to actually use that data intelligently and make decisions so those are two pieces that we have live on our our platform today um another one that should come very shortly is the ability to use uh generative AI to run intelligent search queries that are actually insightful so again you're a sovereign wealth fund uh you've got uh sort of hundreds of billions of dollars invested across multiple asset classes through multiple teams at your organization if you just have a simple question which is what what is my exposure to European manufacturing because uh you sense a policy change coming down the pipe uh it you know that gen should be able to look across your data and give you a smart answer to to what your exposure is so um those are two or three of the things we're working on in our um in our analytics platform for investors thank you and um hassut so um IDI has been talk talking about lifting the veil in private markets investing so can you talk us through around what that entails and why that's so important yeah thank you um so one has to understand like some of the key difference between public markets and private markets as you all know uh public markets has extensive data transparency either by regulation or just because of the trading venues and exchanges there's a tremendous amount of data available but the situation is almost diametrically opposite when it comes to private markets uh the private markets are basically opaque uh so that's really the stage that uh it's a backdrop on which we are operating uh if you think of again also that the engagement with private markets is actually increasing uh many new investors are coming in into this Market because of uh new modalities of access into the market but the situation with data transparency has not changed it persists and it's across the board from basic data to analytics uh is basically non-existent so there in there in lies an opportunity a business opportunity and IDI U our company is working very rapidly and we just launched our AI co-pilot platform called Dana which is addressing these issues and I'll tell you very briefly how how Dana is doing it so uh in not going into too much detail but uh first is the question of how you actually have data on the private markets now this data is highly fragmented and disaggregated it's all over and if you look at public sources you have to think about putting together a jigsaw puzzle corresponding to every company and there are millions of companies so how do you do that well we are using AI at massive scale to assemble these millions of jigsaw puzzles uh and we're doing it using public sources at internet scale using our own uh proprietary technology and models and and at present we have a massive database from that but that is not the the real uh uh trick that we have what we're doing is we're training uh other a whole collection of proprietary uh domain specific models that are uh learning from all this data uh hidden patterns and is able to project and actually infer the trajectory of companies uh into the future right so uh in brief this two things and many other things combined Dana is actually helping lift the veil on uh Public Market investing and it's filling this uh really important need thank you so we've talked about the positives and let's look at the more on the skeptic skeptic side of skepticism side of things um Deacon you you know there's a lot of worried commentary out there about AI replacing jobs which is something that we talked about in the previous panel as well and um competing with the human brain what's your take on this um so the the risk of um AI taking over people's jobs well that's totally natural and understandable um but as the founder of business that brings together the very latest in a I and machine learning Solutions with our own team of dedicated intelligence agents and risk practitioners I see it in a slightly different way so I see that AI is a massive enabler um it augments our capabilities as humans to do more business and make better faster decisions so if I can give you a a quick live example just to paint that picture um recently we worked with uh investigative journalist um who was investigating the links between a PE fund and a Latin American drugs cartel now he had been on this investigation for nine months uh he had spoken to um whistleblowers in the company who had actually informed him of these links so he knew it was there but in nine months he was unable to find any direct evidence um so he came to us we gave him themus search and in half an hour he was able to find Direct and evidence-based links from the PE fund to the Latin American drugs cartel now that was through seven degrees of separation so seven layers of corporate data from the UK to Jersey to the SE shells to Dubai to the males and back to Panama where the company was the known uh operator company for that drugs cartel but in half an hour he had Direct evidential proof of Criminal Intent and wrongdoing so imagine his Joy nine months of work and he'd solv that case in half an hour and for me that is really the power of AI thank you um and you know mha moving on to you first um moving beyond quote investing activities how are you using AI to improve other financial services for clients yeah we've been at this for about 5 years in terms of building AI for customers of our various services not just the data and analytics I spoke about but of course all of our core businesses are on custody payments clearing settlement Etc and by the end of this year we'll have about 40 use cases live in production for our customers uh to just give you a couple of examples uh for our payments business extracting unstructured data from wire transfers sort of passing that on to the payment processing engine such that it can deliver then value added services for either the merchant or the consumer based sorry about that uh based on that unstructured data that has now become useful right uh another tool that we use is liquidity forecasting sort of getting very smart about informing customers about what their cash positions are likely to be at the end of XY and Z time period such that they can make really smart decisions about what to do with the cash they have on hand and H and how to actually deploy that cash for Returns on an intraday real time uh over a week basis right so really being able to be much more agile in terms of how do you actually deploy your liquidity and perhaps earn a return on it based on our forecasting models um in other place we deployed a sort of uh on the trade side Predictive Analytics to predict uh the likelihood of um a trade transaction and the associate Associated payment settling on time what are the risks to it when is it expected to settle Etc such that you can get ahead of any bottlenecks and actually address them so given the breath of services we're in um there's a lot of different uh use cases like I mentioned 40 uh by the end of the year in production and a lot of it is actually this is not just about workflow automation that we're doing more internally we have an Enterprise AI system that's sort of making our own colleagues much more productive uh but on the customer side we're focused on actually unlocking value even more so than sort of uh uh efficiencies thank you uh and Deacon can you briefly tell us more about how AI tools led to building your business Bullpen oh sorry sorry John John can you tell us more about how AI tools is just because we're dra on time um led to building your new business Bullpen and the type of financial firms that have been adopting it sorry we just only have three minutes or so so yeah I'll go quickly yeah I mean I think what what our our value proposition is uh to make uh people more productive to allow them to do uh more thinking uh more value added work so the example I gave before if you are previously spending six and a half hours in report you can do it in 30 minutes it it allow it it creates a much better better experience um it I think culturally at firms where people are overworked it's it's it's really a a game changer and so that that's really allowed us to to engage with all s all sorts of financial institutions from um large Banks uh investment Banks to uh wealth managers uh buy side firms um so yeah pretty much across the board thank you and arish so um you know there are concerns around the environmental impact of AI growth how do you see this and how can it be balanced and hassut if you have any inputs here too we can um please also do do highlight that yeah so with uh AI advancement and more demand for data senders especially there's of course going to be increase in demand for energy consumption as well as water usage um but that's also uh leading to more Innovation uh using AI itself in terms of uh improving Energy effic Efficiency for instance uh Google was able to reduce its data uh data center um power consumption by 40% and then it's also leading uh these companies to look at uh other sources of energy for instance they're looking at uh nuclear uh Power which in turn could also help in terms of reducing the uh per unit cost for especially in case of nuclear which has you know not been as competitive as other sources and at the same time for investors I think it also uh presents um equally an opportunity to invest in AI uh across different SE uh sectors where it can be applied and also help improve investment performance for themselves because now you have the technology to understand more data at speed and with more PR uh Precision yeah and just to add to that um we have to understand that we are really at the very beginning of the uh transition into AI in a serious way and there will be lots of optimizations possible both in the software side and Hardware side on the hardware side there will be very specific chips for training versus inference there'll be lot more that can be done by pushing out inference to the edge uh and that's defin for example Apple has that as part of their policy and many other companies are going to follow suit uh and then on the software side you know lots of things can be done in quantization and other software optimization techniques so when you combine all of these things two or three orders of magnitude more efficiency can be bought back even though we would need uh more computation but on net uh you know I don't I don't see that the energy demands are going to really uh completely overwhelm us thank you very much um unfortunately even though we had um two or three more questions our time is up but this was a really good session thank you very much to the panelists and thank you very much for joining us today thanks guys [Music] w