Chae-young Moon

Published 2025.02.26 09:42 Modify 2025.02.26 09:43

'Fresh Data and Delicious Investment Recipes', 

The Alchemist Enhancing Financial Consumer’s Benefits with Data

No matter how excellent an investment algorithm or artificial intelligence system may be, if the reliability of the data is not guaranteed, it is difficult to lead to a good investment strategy. To address this, OUTSHINE has developed a financial data analysis platform called ‘FINATA’ to assist stock investors in making efficient stock investments. ‘FINATA’ provides various services, including stock analysis, screening, and backtesting, based on highly reliable data built by directly correcting and preprocessing numerous errors. OUTSHINE is leading the way in enhancing the credibility of the Korean stock market by analyzing existing financial data to select key accounts with high long-term correlation and sustainability with stock prices and reconstructing them into financial indicators optimized for investment.

SooWon Kim, CEO of OUTSHINE, Inc.

‘FINATA’, A Financial Data Analysis Platform Providing Reliable Data

The financial data analysis platform ‘FINATA’ introduced by OUTSHINE is rooted in the experience of CEO SooWon Kim, who has worked as a stock fund manager at securities and asset management companies for over ten years. CEO Kim stated that he established a quant-based value investment management philosophy while managing entrusted assets of financial institutions and pension funds.

The 2009 introduction of K-IFRS for domestic listed companies sparked CEO Kim's entrepreneurial idea. The shift to consolidated financial statements significantly altered accounting indicators, disrupting data continuity. While aimed at improving transparency, this change inadvertently reduced data utility for quant managers. CEO Kim noted that at the time, Korea’s national competitiveness was relatively high among OECD countries, while accounting transparency recorded a disgraceful low. Motivated by this discrepancy, he collected data, established the company in September 2020, and launched full-scale commercialization.

“No matter how talented a chef is in developing a delicious recipe, a dish made with spoiled ingredients can never be the best. Similarly, even if an excellent quant model is developed, if the reliability of the data is low, stable operational performance cannot be achieved, which led me to decide to start a business.”

Contrary to the expectation that the business could be quickly developed once the data was built, the financial data of thousands of companies was vast, and the complexity required more time and cost than anticipated in the data refinement process. OUTSHINE established the beta version of the financial data analysis platform FINATA last September, finally providing an opportunity to offer services to customers. Additionally, to verify the platform’s data and secure credibility, academic data is supplied to universities and academic societies, while multiple MOUs have been signed with domestic and international securities firms, asset management companies, and fintech companies for data platform activation and data supply contracts. The company plans to enter full-scale commercialization after field testing and debugging within the year. CEO Kim explained that the data supply business must ensure stable supply at predetermined times, beyond data integrity, while also considering issues such as copyright and security, and that they are persistently working towards platform commercialization through various collaborations and tests.

“Unlike manufacturing, where competitiveness can be intuitively confirmed by comparing products and facilities, finance is difficult to evaluate intuitively. I believe that forming a consensus through communication with customers and colleagues and establishing reliable relationships is the greatest competitiveness. I aim to utilize various expertise in the right place through good relationships with good people.”

For CEO Kim, who majored in business administration, programming for data handling and analysis during his days as a stock quant manager was a challenge in itself. The continuous process of learning new things continued from the establishment of OUTSHINE, the development of the FINATA platform, to the collection of big data and the development of intelligent services. Fortunately, learning out of necessity was interesting, and he quickly acquired the skills, now teaching students in fields unrelated to his major. CEO Kim finds meaning and fulfillment in the journey of creating his own path by accumulating daily learning experiences that change the direction of life.

SooWon Kim, CEO of OUTSHINE, Inc.

Maximizing Data Reliability through Independent Data Collection, Refinement, and Construction

Recently, Financial authorities are implementing measures to enhance corporate value and stock market quality. The Financial Services Commission is promoting value-up programs, while the Korea Exchange is tightening delisting requirements to improve transparency and comparability. Regulatory compliance guidelines are being prepared to boost supervisory efficiency. CEO SooWon Kim stated that their company provides services that streamline financial analysis, accelerate investment decisions, and support data-driven capital market growth, aligning with current regulatory trends.

Like the FINATA’s slogan ‘Fresh data and delicious investment recipes’, FINATA is a platform that allows easy simulation of what kind of investment returns might result by utilizing various recipes(investment models) based on freshly processed ingredients(pre-processed data). By independently collecting, refining, and constructing data, the emphasis is placed on supplying reliable data above all. Errors in financial data are detected and corrected through a financial data error detection program. Furthermore, all corrected financial data disclosures are reflected to maintain the most up-to-date status.

One of the characteristics of the IFRS accounting standards is the shift from rule-based to principle-based, allowing the preparer’s judgment to create accounting information. The broad recognition of the preparer’s discretion has led to different accounting treatments among companies, making it difficult to compare performance across companies. As industries, management, and contract types diversify, the notes to financial statements, which are prepared individually, have become excessively complex. The mixture of structured data in the main text of financial statements and unstructured data in the notes has caused difficulties in securing quantified data, making financial evaluation challenging for investment and credit rating agencies.

FINATA has constructed financial accounts that facilitate performance comparison across companies by quantifying the unstructured data in the notes, which are more voluminous and important than the main text of financial statements, and standardizing financial accounts that vary by company through labeling. CEO Kim stated, “While accounting reports assess recoverability based on net realizable value(NRV) or liquidation value for investor protection, investment focuses on business value and future value”, adding that they are building financial accounts suitable for investment by categorizing current assets, liabilities, and profits based on business relevance rather than liquidity.

Recently, Financial authorities have introduced XBRL, an international standard for financial reporting, to address complex note issues. Implementation begins in 2024 for companies with assets between 500 billion and 2 trillion won, extending to smaller firms in 2025. While this may improve accounting transparency, it risks creating data discontinuity similar to the 2009 K-IFRS transition. CEO Kim emphasized their focus on maintaining data continuity and enhancing usability by pre-quantifying and structuring notes.

The growth of the ETF market, which has surpassed the public offering fund market, and the robo-advisor market, which is reducing human intervention, are also factors that make FINATA’s growth promising. For services combining artificial intelligence and big data to become increasingly advanced and actively managed, such as stock analysis rather than just asset allocation, the high-quality financial data provided by FINATA is essential. CEO Kim added that they are actively considering entering the ETF market in the future.

SooWon Kim, CEO of OUTSHINE, Inc.

The Key to Successful Investment Decisions Lies in the Integrity of the Underlying Data

CEO SooWon Kim stated that FINATA is a backtesting simulation tool that considers errors such as survivorship bias, look-ahead bias, and backfill bias. He cited an example of low PER investment cases using the existing net income account and the sustainable profit account generated through the assets and liabilities related to the business by FINATA. It assumes a simple process of investing annually in companies within the top 10% of low PER and rebalancing at the beginning of each year. Over the past 24 years, KOSPI has risen 2.7 times(with an average annual return of 4.2%), while low PER has increased 47 times(with an average annual return of 18.9%), recording excellent returns. Calculating PER with sustainable profits can lead to a dramatic result of an 84.5 times increas (with an average annual return of 22.1%).

“Finance and economics naturally accumulate time-series data over time, and it is a field where utilizing data is very easy due to infrastructures like disclosure systems and computerization. Perhaps because of this, there is a tendency to easily trust the collected raw data. Also, there is a tendency to overlook past data while focusing on analysts’s consensus data. When raw data is directly applied to the model for analysis, the analysis results and usefulness significantly decrease.”

Data is compared to crude oil in the 21st century. In the process of finding hidden patterns or meaningful value in data, high added value can be created, or misinterpretations can cause damage. Arvind Krishna, CEO of IBM, also mentioned that data-related tasks such as data collection, identification, and refinement account for 80% in terms of time and cost in AI technology development. CEO Kim asserted that if one fails to check risk factors while focusing only on a rapid decision-making system, it can never lead to successful decision-making. Like panning, which selects the heaviest gold by adding water to crushed ore, FINATA helps successful investment decisions by securing integrity data by filtering out elements that can hinder investment, even if the process takes longer.

The use of FINATA, which implements easy data analysis and corporate information inquiry for stock investors, is not limited to stock investment. CEO Kim cited an example of generating codes by classifying sectors based on actual sales ratios and main businesses rather than traditional standard industrial codes. This can be used not only by stock investors but also by general companies to analyze competitors, or by economic departments or local governments to establish support and regulatory policies by combining industrial statistics and market data. It also helps resolve information asymmetry in the recruitment process. Job seekers can determine if a company is substantial enough to share their vision, and companies can use it as a means to promote the image of excellent small and medium-sized enterprises externally. Additionally, it is expected to be utilized as a monitoring tool by financial and tax authorities to prevent economic crimes such as tax evasion, breach of trust, and embezzlement by intentionally generating temporary profits. CEO Kim emphasized that the data supply business is an attractive business that can generate meaningful added value through heterogeneous combination of data, and FINATA is always ready to collaborate if there is interest in its data.

“Complex notes of financial statements and corporate governance and issues pertain to the domestic stock market. To solve these problems, we have built a database of domestic listed companies, but everyone who has encountered our platform asks if there are plans to build overseas data.”

Recently, foreign direct investment(FDI) has reached an all-time high, driven by foreign companies’s trust in Korea’s stable investment environment and the expansion of investment demand in the domestic advanced strategic industries. OUTSHINE has continued collaborations with overseas financial institutions, primarily in Greater China, including China and Hong Kong. The data provided during the process of due diligence and monitoring of domestic companies received positive responses. OUTSHINE is commercializing the consulting sector that provides customized data. CEO Kim stated that the inflow of foreign direct investment has a significantly positive impact on revitalizing investment in the domestic real sector and increasing employment, and he finds it rewarding to lead a business that contributes to the increase of foreign direct investment. He plans to strengthen competitiveness by building a business model that only OUTSHINE can offer.

Contributing to the Advancement of Korea’s Finance by Addressing Issues Behind the Korea Discount

As Korea approaches the threshold of a super-aged society, elderly poverty remains an unresolved social issue. CEO SooWon Kim emphasized the need to focus on youth poverty, which is often overshadowed by elderly poverty. A recent policy report reveals severe economic disparities among Seoul's young adults (19-39), with 53% classified as economically impoverished. Nationwide, the asset gap between the top and bottom 20% of youth exceeds 35-fold. CEO Kim reports that 420,000 young adults have withdrawn from job-seeking, attributing this to helplessness from relative poverty. He warns that continued trends could lead to social isolation and declining birth rates, potentially impacting national competitiveness.

CEO Kim suggested that one of the solutions to break the current vicious cycle is ‘stocks’. They are more accessible compared to other assets and offer high liquidity. He promised to strive to establish a proper investment culture by providing a stable investment channel in an era where relying solely on earned income is insufficient for retirement, and by offering opportunities for good companies to be re-evaluated.

“The domestic stock market continues to face challenges, with large-cap stocks shunned by investors due to complex governance structures and opaque accounting, and small-cap stocks reduced to playgrounds for short-term profit-chasing leading rooms. It is also a difficult market for startups developing investment platforms. I expect that FINATA’s highly reliable data and investment strategies will improve information asymmetry and contribute to reducing the asset wealth gap through stable returns. Nationally, we will also contribute to enhancing accounting transparency and increasing corporate value.”

CEO Kim believes that understanding the essence and predicting long-term changes is the most accurate way to acquire information. He aspires to be an alchemist who enhances the benefits of financial consumers by recreating existing financial data into data with high long-term correlation and sustainability with stock prices. OUTSHINE, based on reliable and sufficient data, is leading the way in overcoming the issue of accounting opacity, identified as a cause of the Korea discount, and advancing Korea’s finance.