Allianz-subsidiary IDS and Nordic AI solution provider Silo AI improve data collection and analysis with the help of artificial intelligence

IDS GmbH – Analysis and Reporting Services (IDS), a wholly owned subsidiary of Allianz SE based in Germany, and the Finnish AI solution provider Silo AI have joined forces to collaborate on building AI-driven solutions to improve financial workflows, predictability and risk assessment. As an initial result of the collaboration, the companies have successfully developed and tested a number of methods, focusing on three distinctive use cases with a common challenge.

The three selected use cases – revaluation, GRIPS, and carbon footprint - while targeting different objectives and using different methods – have a common challenge to overcome: the collection of alternative qualitative data and its submission to IDS experts for decision-making. The AI solutions built by IDS and Silo AI are already delivering significant time and quality benefits across various aspects of the data collection and analysis process. IDS experts, relieved from routine tasks, are concentrating instead on solving problems and making better informed decisions.

Comparable portfolio valuation through revaluation

The “Revaluation" service aligns the valuations of financial instruments in an investment portfolio. Different valuation timings can lead to systematic distortions in the analysis of relative investment performance and tracking error. The AI module is trained to identify the most appropriate matches in the valuations while avoiding inaccuracies caused, for example, by implausible jumps in price histories.

Yield curves to value specific financial instruments

IDS' "GRIPS" service generates a bespoke set of yield curves that are designed to value specific financial instruments and estimate interest rate and maturity transformation risks. The jointly developed approach supports the search for curves that best explain the observed market prices avoiding implausible results or jumps.

Sustainability reports made searchable

One aspect of Environmental, social, and governance (ESG) is the recording of the emission targets of companies within the investment universe. The AI solution makes environmental commitments outlined in sustainability reports searchable and transparent. The challenge today is to make the sustainability reports, often shared in a custom pdf-format, accessible as a data source. The solution is able to process thousands of sustainability reports and related news articles. The smart solution is currently targeted at oil and gas companies as well as the automobile industry, enabling IDS to better understand how companies plan to reduce their carbon emissions. The application is unique in the way it captures the qualitative nature of corporate activities related to emissions and reduction-ambitions and is able to answer questions like “what”, “when” and “by how much”.

– In summary, the AI solutions developed with Silo AI have transformed current processes, delivering time efficiencies while providing better and faster qualitative and quantitative information. They enable our clients and IDS to make more agile and smarter decisions, says Thomas Kirchherr, Head of Sales, Account Management and Marketing at IDS.

– It has been a pleasure to collaborate with IDS on many fronts, particularly with AI solutions that support the environmental values that both companies share. The use of natural language processing in the financial world combined with the domain expertise and AI maturity at IDS has been impactful. This clearly shows the value of such technologies in making human-generated content machine-readable, and then searchable by humans, says Peter Sarlin, CEO of Silo AI.