BondIT: Innovation in Bond Portfolio Analytics and Optimization
Background
Collaborating Entities:
BondIT, an Israeli fintech company offering algo-based solutions for bond portfolio construction and optimization, and KIS pricing, a Korean company, wholly owned by Moody’s, offering pricing services for fixed-income securities.
KORIL-RDF
Established in 2001, the Korea-Israel R&D Foundation (KORIL-RDF) is a co-operation between the Republic of Korea’s Ministry of Industry and Knowledge and the Israel Innovation Authority that aims to promote industrial cooperation between Israeli and Korean companies, as well as to encourage joint R&D activities and initiatives that will produce innovative technologies and products.
KORIL-RDF has funded a joint venture project between Israel’s BondIT and Korea’s KIS Pricing to develop software for a unified analytical solution for bond portfolio management.
Who is BondIT?
Founded in 2012, BondIT was created to address financial advisors’ difficulty in compiling meaningful advice from the fragmented data available in the 66 billion dollar fixed-income investments market. BondIT set out to create the ultimate fixed income portfolio management solution, complete with optimization tools to swiftly manage portfolios.
BondIT’s 30-strong team is home to some of the world’s top finance, machine-learning, and data experts, boasting PhDs from top institutions including CalTech University and University of California, Davis.
Successful Innovation
The Challenge
Constructing fixed-income portfolios is one of the most arduous and error-prone processes in the investments industry. Until five years ago, bond trading was one of the least technologically advanced financial transactions on the market, with bonds being traded person-to-person. In this environment, financial advisors and relationship managers struggled to balance the key elements of their business: managing existing portfolios, watching the market, and expanding clientele. Without data transparency and the tools to interpret, portfolio recommendations lag days behind the market, which is constantly in flux. Worse, antiquated portfolio construction techniques cost financial advisors precious time that could be spent developing better relationships with existing and prospective clients. The same time costs lead large financial institutions to incur greater overhead costs by hiring numerous advisors to manage portfolios. The transition of bonds from person-to-person trades to electronic exchange transactions resulted in a world of fixed-income data ready to be mined. BondIT was founded to transform this data into an investment tool that would bridge market realities and unique client specifications.
The Innovation
BondIT’s user-friendly, robo-advisory platform integrates proprietary machine-learning algorithms and SaaS technology to give financial advisors a data-backed advantage in building and managing the life-cycle of fixed-income investment portfolios. The intuitive software allows bond portfolio managers to build tailor-made portfolio options in minutes, and arms advisors with advanced optimization and analytical tools. Notification services ensure that advisors recommend the right adjustments at the right time. BondIT clients have the benefit of analysis from thousands of markets at their hands, differentiating them from their competition, and increasing client trust by delivering increased yields with lower risk. BondIT has a range of construction and rebalancing tools to conform to client constraints and produce personalized recommendations.
The Global Impact
BondIT’s advanced financial technology impacts a variety of key players in fixed-income investments. Clients benefit from personalized, efficient portfolios that reach targets while incurring minimum risk exposure. More than expanding financial advisors’ knowledge and informing their decision-making processes with algo-backed recommendations, advisors benefit from substantial time savings that enables them to devote more time to clients and business growth. Time savings is also a boon for large financial institutions, who stand to log more overall transactions with less manpower. From individual clients to large financial institutions, BondIT’s digital revolution for fixed-income investments holds the promise of better, securer retirement portfolios worldwide.