How AI-Driven Investing Strategies Successfully Adapted to the COVID-19 World

Tommaso Migliore, MDOTM’s CEO tells us how to work together to develop and deliver the best technology in investment decision-making.

First of all, how are you and your family doing in these COVID-19 times?

Tommaso Migliore: Luckily we are all doing fine, thanks. No one in my family nor MDOTM has had any severe health issues.

Tell us about you, your career, how you founded MDOTM.

Tommaso Migliore: Before starting MDOTM, I played ice hockey at the professional level for 10 years and captained the Italian National Team at the XXVI Winter Universiade. I have always loved to compete.

The idea for MDOTM came while I was in a university lecture about systematic investing through mathematical models. I always had an interest in financial markets, but I became fascinated with how applying the scientific method to investing could lead to better investment decisions. That same evening, I called my best friend Federico Mazzorin – a physics student at the time – and we immediately started developing the first investment model. We combined our skills: my intuition and knowledge of the markets and his coding and Artificial Intelligence expertise. At first, we invested a small amount of money that we had saved over the years.

In late 2015, after approximately two years of experiments with positive results, we decided to move to London to start MDOTM. Ever since then, we haven’t stopped growing. In 2017, we were the only European fintech selected to participate in Google’s acceleration program in Silicon Valley, and nine months later, we closed a €2 million funding series. Today, our team comprises physicists, PhDs in AI, and veterans in the finance industry. We work hand-in-hand with banks, family offices, insurance companies, wealth and asset managers to create tailor-made solutions driven by Artificial Intelligence. Our technology is continuously improving, and we aim to expand globally, with new offices opening planned for 2021-22.

How does MDOTM innovate?

Tommaso Migliore: Being innovative means questioning the status quo constantly. We leverage two key drivers to do this: technology and people. Our passion for innovation attracted brilliant, inventive people who helped develop ground-breaking technologies from the very beginning.

We’ve focused our efforts towards R&D; we have invested roughly 75% of our yearly expenses in R&D and set up partnerships with leading universities through our research centre – the MDOTM LAB. The LAB provides us with state-of-the-art insights on finance and Artificial Intelligence while also allowing us to collaborate with young and innovative talents.

Our ability to innovate has been recognised at a national and international level by institutions like Google and NTT Data. We were recently awarded 1st place in “Financial Innovation” for the Asset Management category by the Italian Financial Innovation Association.

How does the coronavirus pandemic affect your business finances?

Tommaso Migliore: From an operational point of view, we were prepared for some of the pandemic challenges. As a startup, we were used to being flexible and working remotely.

On the business side, we’ve experienced a drop in new business opportunities. The probability of closing new deals (which is incredibly important for a fast-growing startup) dropped significantly given the pandemic’s uncertainty, and the onboarding times doubled.

Yet – thanks to our business model based on long-term partnerships – cash flows remained stable due to prior closed deals. Our partners’ confidence in our ability to perform enabled us to continue investing in innovation and future projects. I believe all of these components were and still are crucial in navigating through the pandemic.

Did you have to make difficult choices regarding human resources, and what are the lessons learned?

Tommaso Migliore: The pandemic brought substantial challenges in different areas of the business, which led to difficult choices. Perhaps, the most complicated situation was our Business Development team’s complete restructuring to implement a new growth strategy coherent with the new normal.

The most important lesson learned is that it is possible to hire remotely and that, even though onboarding people and bringing them up to speed remotely can be challenging, a strong corporate culture and passionate team can quickly foster strong relationships and cohesion.

How did the relationship with your clients evolve? Do you use any specific tools to be efficient?

Tommaso Migliore: During these difficult times, we did everything we could to stay close to our clients and to support them with analysis and reports.

We have also supported our clients with an influx of virtual roadshows to thoroughly explain our models’ behaviour and how we train the AI. This has helped them better convey AI’s benefits in investment strategies to sell more efficiently to their own clients.

However, we did not only focus on our existing and prospective clients. We thought that in such an unusual, new situation, it would be crucial to educate the broader public on what was happening in the financial markets. For this reason, we organised webinars, wrote papers, and even published a book. We showed people that the scientific method could still react rationally and create valuable investing solutions, even in such an uncertain environment.

Did you benefit from any government grants, and did that help keep your business afloat?

Tommaso Migliore: No, we didn’t. Thankfully we were well-capitalized and our industry was not totally affected by the pandemic.

Your final thoughts?

Tommaso Migliore: Rahm Emanuel once said, never let a crisis go to waste. COVID-19 has undoubtedly brought incredible amounts of tragedy and suffering, but it will open up new opportunities and we must be proactive and creative to come out stronger than before.

Your website?

https://www.mdotm.eu/

Biography:

Tommaso Migliore is the CEO and Co-founder of MDOTM, a fintech startup that develops AI-driven investment strategies and acts as an advisor to institutional investors. In 2017 MDOTM was the only European fintech company selected by Google for Entrepreneurs to participate in its accelerator program in Silicon Valley. Tommaso obtained a master’s degree in Finance from UCSC Milan and a Global Management certificate from Stanford University. He played ice hockey at a professional level for ten years, representing Hockey Club Milano and the Italian National Team.