MDOTM, AI-Driven strategies for institutional investors

MDOTM is the European leader in developing AI-Driven strategies for institutional investors. We work closely with our clients such as Banks, Family Offices, Insurance, Wealth and Asset Management companies to provide them with reliable, robust, and bespoke models that enhance their investment decision processes. We interviewed CEO Tommaso Migliore to find out more about the goals and future plans of this fintech, which uses the advantages of artificial intelligence to change the world of finance.

What is MDOTM’s mission?

Our mission is to bring the scientific method into the world of investments, and we do so by exploiting the latest breakthrough technologies as well as advanced statistical techniques. This allowed us for the creation of rational and unbiased models that are able to build more robust and efficient portfolios. In this context, data is the fuel for our engine: every day we collect and clean the huge volume of noisy market data. Then, we use our proprietary technology called A.L.I.C.E. (i.e. Adaptive Learning in Complex Environments) to detect the signals and patterns hidden within the data, in order to develop actionable investment strategies that exploit changes in market inertia and risk premia.

What are the benefits of investing with AI-based models?

In the last decade, the internet has democratised access to information. As a result, today instead of information scarcity we face the opposite problem: information overload. This trend has been particularly relevant in the financial markets, which have become increasingly complex. To remain competitive, it has become essential to exploit advanced Machine Learning techniques in order to be able to capture signals within huge amounts of data and transform them into effective investment strategies.

Artificial Intelligence supports us in building portfolios that are reliable, unbiased, tailor-made, and able to adapt to the constant changes in the markets. Thanks to their capacity to continuously learn from market data, AI-driven models can adapt to never-seen-before scenarios and update their knowledge as new data becomes available. Furthermore, data collected is transformed into actionable portfolio management insights that do not carry any emotional biases.

How has MDOTM grown since its creation?

MDOTM was founded in London in late 2015 when Tommaso Migliore and Federico Mazzorin – graduates in Finance and Physics respectively – developed their first investment model for financial markets. Starting from personal savings invested in their investment strategy, the company grew exponentially throughout the years.

In 2017, MDOTM was the only European fintech selected to join Google’s acceleration program in Silicon Valley and, nine months later, we closed a €2 million funding round. This allowed us to grow across geographies and hire key industry experts for our team, currently composed of 30 people based between London and Milan. A new office is set to open in New York in 2022, to boost our global expansion.

Our technology is constantly improving, driven by continuous efforts towards Research & Development: overall, roughly 75% of our revenues are invested in that area. Our ability to innovate has been recognised nationally and internationally by institutions like Google, the Italian Financial Innovation Association (AIFiN) and NTT Data.

Are you following any Open Innovation projects?

We strongly believe in the power of synergic collaborations and open innovation, and we embrace it from different perspectives. On the one hand, we partner up with established institutional investors to help them innovate their investment process with our state-of-the-art technology. Using our AI-driven methodology, we are able to provide them with adaptive and unbiased portfolios that best meet their investment constraints. On the other, we collaborate with the major Italian and European universities through our research centre: the MDOTM LAB. Here, university professors, Ph.D.s, and talented students bridge the gap between economic theory and real-world practice by pioneering new strands of research, at the intersections between Behavioural Finance, Portfolio Management and Artificial Intelligence. This allows us to integrate our internal R&D findings with external research insights to stay at the forefront of innovation.

How is your team composed?

Through the years, MDOTM experienced a continuous rapid growth, recently turning into a scale-up after its initial start-up phase. MDOTM’s team faced an analogous expansion trend, and it is expected to double its size by the end of 2021. Our people reflect our approach, which is deeply rooted in science. As such, MDOTM’s team is made of creative innovators, scientists, and industry veterans with backgrounds ranging from finance and statistics to computer science and physics. The different divisions work side by side in an effort to build the best AI technology for investment decisions that major financial institutions can rely on.

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Author: Tudor Sava

6 Ottobre 2021