In 2024, the viability of the services and products offered by companies involved in FinTech is strongly intertwined with the capability of these organizations to adapt to market changes and implement the latest data encryption technologies for the online platforms offered to clients. Automated, AI-based asset manager solutions have transformed into an industry norm, and since the development of cryptocurrencies, they are intertwined with the digital processes offered by FinTech businesses.
How can a digital asset manager solution improve the flexibility and overall profitability of companies offering digital financial services? For one thing, DAM solutions leverage state-of-the-art technologies like blockchain and AI to streamline the management process of digital financial assets, which can significantly reduce the internal workload of human operators. On top of that, since digital asset management tools often make use of blockchain, the security of DAM-based platforms is more significant than traditional financial asset management platforms, and they have lower risks of being successfully targeted by fraud attacks.
What Even Are Asset Management Solutions?
In FinTech, online, AI-based asset manager solutions refer to platforms that can be leveraged by companies or individuals active in the financial sector to manage their investments, inspect portfolios, and streamline internal procedures while mitigating the risks of the implemented financial activities. Digital asset manager tools can be leveraged to remotely manage and optimize investment portfolios, diversify investment avenues, and keep track of the monetary returns of digital assets.
On top of that, such platforms can automate the creation of reports relevant to the client’s financial activities, analyze the risk factors associated with the investment portfolios, simulate market developments, and provide investors with a secure environment in which they can connect with other financial entities. Plus, in the financial sector, DAMs are used to store digital assets (like crypto or non-fungible tokens) in an encrypted repository that can be accessed online through a login method assisted by two-factor authentication.
DAMs facilitate the tokenization of physical assets like bonds, stocks, or precious metals, provide a secure way to exchange digital assets with other traders, and represent the most financially viable way to keep your activities up-to-date with the AML regulations active in your sector. Digital asset manager solutions can be integrated with legacy financial services, can reduce the trading risks associated with market volatility, and can streamline work connections by encouraging real-time asset-management collaborations.
What Is the Connection Between AI and DAM Solutions?
In the financial sector, the utilization of AI has become, in the last couple of years, a necessity that has radically transformed the manner in which digital assets are stored, traded, and checked for anomalies that can signal digital fraud. Artificial intelligence solutions help automate the process of classifying digital assets and detect unusual patterns in the recorded data with more speed and accuracy than traditional asset management tools. AI can utilize multiple data streams at once to detect the risk level of investment portfolios, leverage blockchain technology to mitigate the impact of data breaches, and help financial companies respect the AML and KYC regulations relevant to FinTech businesses.
AI can improve the security of digitally stored, tokenized items by implementing autoencoders and performing real-time management of transactional data. In other words, the systems utilized by AI-based asset manager solutions can look for patterns in the financial transactions conducted on specific platforms and leverage clustering algorithms like DBSCAN to detect and stop unusual, coordinated transactions. The NLP models utilized by AI-based digital asset manager platforms can aid in AML monitoring, provide a risk score for each transaction by leveraging complex probabilistic computer frameworks, utilize RNNs to monitor external data breaches, and use techniques like SAST to automatically find vulnerabilities in your digital data.
What Is the Role of Custodial Platforms?
In the world of financial technology, custodial platforms refer to digital solutions for storing, encrypting, or managing either traditional financial instruments, cryptocurrencies, or tokenized assets. Custodial platforms can be utilized for the long-term storage of digital assets, provide a higher level of security than conventional online data storage methods thanks to the utilization of private keys, can be used for the automatization of transactions based on predetermined data, and are scalable, as they run on a cloud-only platform which can handle multiple users at once.
Custodial platforms are especially useful for the long-term storage and management of cryptocurrencies like Bitcoin, as they provide a convenient way to access them at any time, regardless of device. Conventional crypto wallets require users to manually set up the access keys for their digital assets, which can be problematic if you somehow manage to lose them. Plus, if you don’t have a backup of your access keys, your data will pretty much remain inaccessible. Custodial platforms, on the other hand, reduce the risk of permanent cryptocurrency loss by providing multiple avenues for account recovery. On top of that, digital custodial platforms often feature user-friendly interfaces and provide an easy avenue to trade or sell coins securely and cost-effectively.
An Investment for Long-Term Financial Prosperity
Online asset management tools can often be personalized in accordance with the particularities of FinTech companies and provide a new layer of transparency to the financial services offered to market-focused clients. Not least, these AI-based solutions are crucial for getting in line with the international regulations active for all companies present in the digital financial medium. Digital asset manager solutions can perform automatic compliance checks for the available financial services, monitor transactions in real-time, and automatically back up audit trails that can later be leveraged in case of inspections from national or international bodies.
Digital asset manager AI-based solutions are characterized by their flexibility, integration with multiple business-specific software tools, and security. Sure, their utilization is not exactly free. However, by and large, DAMs represent the best way to improve the ROI of your portfolio, increase the security of your tokenized assets, and invest your crypto in a secure environment that respects the latest KYC and AML regulations.
