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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SWITCHO, conquering the banks’ customer base

Switcho is aimed at a B2C clientele, but also at small enterprises and VAT registered companies, and offers a service which helps to understand one’s own expenses and manage savings actions. It operates with two logics, a financial one, to always improve the starting situation of our user, and a simplification one, to manage all the bureaucracy related to the saving action. An app with access to current accounts will soon be launched, making it the first service in Italy to link a single transaction item to a savings action.

Switcho is currently at the end of its seed phase and has raised around €700,000 in private funding to date, in addition to another €700,000 from bank loans and state aid. It has opened a €1.5m round with which it will fund the growth of its community of Switchers as well as new product developments including entering new spending markets but also developing more fintech features related to spending tracking

The team was born in 2019 from the idea of its three founding partners: Marco Tricarico, Redi Vyshka and Francesco Laffi. The first two have experience in both strategic and finance consulting while Laffi has been the CTO of important digital companies. Over time, the team has grown in the areas of strategic planning and marketing, operations and product development, and totals now 15 employees with an average age of around 30 years, all in smart working from Milan, the rest of Italy and even Albania as far as operations are concerned.

From this year Switcho, as it grows, has started to collaborate with external companies in order to offer its service to their customer base. It is also talking with several banks as some studies conducted by the observatory of Fintech have noted that users who use the home banking service as a first requirement would like to see services related to the management of the payment of bills.

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Raisin arrived in Italy and joined the FD community

Raisin, pan-European marketplace for wealth management, arrives in Italy and signs its first alliance with Banca Sella. This partnership will allow the bank’s clients to access new deposit account solutions offered by other Italian and European banks. We interviewed Federico Roesler Franz, Country Manager Italy, to learn more about the strategy and objectives of this fintech.

What does Raisin do and who is the target?

Raisin is a fintech and the leading European cross-border marketplace for wealth management. We connect banks across the continent with consumers looking for competitive deposit offers for their savings and, in effect, harmonize the European deposits space. We’re excited to have just entered the Italian savings market through a partnership with Banca Sella. The bank has integrated Raisin’s marketplace, offering its customers a range of deposit products from Raisin partner banks within its own ecosystem.

So, in brief, Raisin addresses these groups:

  • B2C – retail clients: Save & invest profitably and conveniently
  • B2C – business clients: Save & invest corporate accounts
  • B2B – partner banks (currently 14 from Italy): Offer deposit products on our platforms
  • B2B – distribution partners (e.g. Banca Sella): Integrate our products on their platforms to more efficiently and cost-effectively expand their product and service range for their customers

How Raisin has grown in the last months and in what phase you are?

Some of Raisin’s recent achievements:

  • In addition to Italy with Banca Sella, nine platforms across Europe (Germany, UK, Spain, France, Austria, Netherlands, Ireland and the Europe-wide
  • U.S. market entry with a B2B SaaS offering
  • 100m EUR Series D with existing investors in early 2019, followed by 25m EUR investment from Goldman Sachs in July 2019
  • Four major acquisitions integrated in the company and rebranded: UK fintech PBF Solutions (now Raisin UK), MHB Bank (now Raisin Bank), German pensions specialist fairr (now Raisin Pensions), and the U.S.-Spanish financial software company that is now Raisin Technology.
  • 28bn EUR assets brokered and 650m AuM in ETFs and pensions
  • Trustpilot score 4.5, NPS 73
  • Co-founded – together with 20+ leading European fintechs – the new European Fintech Association based in Brussel to advocate for the single market for financial services and other topics

Have you done and/or are you interested in doing open innovation projects? With what kind of subjects?

In terms of open banking, Raisin has innovated by building the only pan-European digital marketplace for deposits, partnering with banks (including more than 10 Italian banks) on open banking infrastructure and simplifying cross-border digital banking for banks and consumers. Prior to Raisin, no such cross-border solution existed in Europe much less available in every European market. The Raisin deposits marketplace serves consumers, in giving them access to more competitive deposit products, and serves banks looking to diversify their funding sources.

But we also realized that by integrating this online marketplace, all kinds of financial institutions (as in the case of Banca Sella) could extend their product range for their customers, to include deposit offers from external parties. In some cases it also helps banks siphon off excess cash and reduce the pain of negative interest. With white label integrations Raisin is often invisible, and that’s the point – it’s about the solution we can provide B2B as well as B2C, not the name attached to it. I think it’s a good representation of the innovation mindset of fintech.

How can the Fintech District help you in this respect?

The Fintech District community offers a great chance for us at Raisin to engage with and learn from a wide range of banks, fintechs, and other financial institutions. We are also excited to share our experiences entering the Italian savings market and our insights as a fast-growing pan-European fintech, and we welcome the chance to connect.

How is your team composed and what kind of figures are you looking for on the Italian market?

Raisin employs around 350 people in Berlin, including a dedicated customer service team operating in multiple languages; another 30 in Manchester for the UK operation; ca. 35 team members in Frankfurt (Germany) at Raisin Bank; and a Raisin U.S. team of 13 based in New York and Madrid.

Wavenure: interview with Giulio Massucci

Wavenure applies artificial intelligence to investment decisions in financial markets. The cognitive intelligence system used by this startup, a member of the Fintech District, assesses the performance of markets and individual financial instruments and combines quantitative approaches, decision-making algorithms of its production, and expert systems based on technical analysis.

Wavenure decides on its own whether or not the stock is to be bought or sold. Co-founder Giulio Massucci explains: “our offer is aimed at the world of financial institutions, then online brokers and consulting networks that want to enrich their services and want to support their users or their financial adviser”.

Wavenure also addresses the world of asset management in order to optimize the decision of professionals as well as there being a desire to bring the intelligent investment decision approach to the world of private investors and traders alike.

That is the reason for which the Wavenure team is about to launch a new service, It will offer “multi-horizon” trading strategies for trading and portfolios to those who want to allocate their capital to the financial markets in a more efficient way.

Wavenure not only operates in Italy, in fact: as Massucci explains, “our business has always been international in scope, because we monitor the global financial markets and turn to every type of investor, in every geographical location”. Massucci explains there are already relationships with banks, even abroad, and the intention is to continue developing on international markets.

In recent weeks Wavenure has also participated in the Singularity University Summit, in Milan, and is organizing itself to present its offer in events focused mainly on the world of innovation and fintech in the field of financial investments

The Wavenure mission is to “bring innovation in the field of investments in financial markets both through an applied approach which combines artificial intelligence with quantitative approaches, and by giving the possibility to offer types of highly performing investment to the investing public”.

“From this point of view the Fintech District offers us the ecosystem which allows us to carry out research in a very dynamic and innovative environment – explains Massucci – it also helps us to constantly monitor all the news from the regulatory point of view concerning the world of investments and wealth management “.

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Virtual B: interview with Serena Torielli

Virtual B is a fintech company with a B2B business model offering a wealth management data driven platform in API. Its vision is that it is data that can lead the wealth management industry to a new level. Its’ mission is to try and transform the data of its customers into solutions which increase their productivity and commercial effectiveness and also give a return as far as investment is concerned.

This year, as CEO and co-founder Serena Torielli explains, the company has launched a new product it is protecting with copyright. It’s called Sidekyc and is “a suite of data analytics for wealth management that we launched in partnership with a large German technology company called GFT”.

Virtual B is very interested in internationalization: “taking care of technology and B2B, it is normal for us that this is the case; for us national barriers do not make sense. It’s different for those who deal with B2C – explains Torielli – because in that case it is necessary to compete with the different regulations and different customs and traditions of the various countries, and also with the different languages “.

For those involved in technology and B2B, and for a company like Virtual B, however, the market is unique “by definition”, in fact it is talking with the platforms and ecosystems of APIs in North America also extended to Asia.

Meanwhile Virtual B will soon also participate in an event organized by an Italian accelerator in London dedicated to scale up and which will present some companies of the Italian ecosystem. “In our company we are not many and do not participate in many events – adds Torielli – we tend to select quality ones where or we can have visibility to open new relationships or learn something. There are not very many “.

Last Fall Virtual B also choose to become part of the Fintech District considering it “the first serious and very well-structured attempt to build a serious ecosystem for the fintech companies that were born or operate in Italy. An initiative of this kind was missing in Italy, we are happy to be part of it, we are very confident and we think that its’ mission is really very interesting “.

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