How Can Analytical & Generative AI Help Build & Optimize Portfolios At Scale?

In a recent podcast MDOTM's CEO and Co-Founder, Tommaso Migliore, delved into the transformative power of Artificial Intelligence in the world of investing. The discussion shed light on various aspects, ranging from the integration of AI in financial decision-making to the challenges and opportunities presented by this cutting-edge technology.

AI Driving Investment Strategies:

Tommaso Migliore initiated the conversation by emphasising the revolutionary impact of AI on the investment landscape. Drawing parallels with a self-driving car, he envisioned a future where AI-driven investment strategies would navigate through the financial markets efficiently. In this vision, portfolios become analogous to a fleet of cars, each with its unique characteristics and constraints, yet collectively optimised for the best results.

Human & AI Collaboration:

A key theme that emerged from the dialogue was the importance of collaboration between humans and AI. Tommaso Migliore argued that the true potential of AI lies in its ability to connect with human perspectives and adapt its output accordingly. He referred to this as "assisted decision-making," underlining the synergy between human intuition and AI's statistical approach. The result is a dynamic framework that aligns with an investor's worldview while benefiting from AI's analytical power.

Institutional Adoption of AI:

The podcast also touched upon the increasing interest of institutions in adopting AI technologies. Tommaso Migliore highlighted how institutions are gradually dipping their toes into this new territory. He explained that the adoption process is similar to a cultural shift within organisations, with varying paces of acceptance. Institutions are exploring ways to incorporate AI seamlessly into each step of the investment process, from strategic asset allocation to portfolio construction.

How AI Empowers The Investment Process

Challenges in AI Adoption:

While discussing the challenges, Tommaso Migliore acknowledged the resistance to change as a significant hurdle. People are accustomed to traditional methods, and overcoming this inertia requires time. Additionally, he emphasised the need for improved explainability in AI models. He suggested that the combination of generative AI and analytical AI approaches can enhance the clarity and transparency of AI-driven decisions.

The Future of AI in Investing:

Looking ahead, Tommaso Migliore expressed optimism about the broad application of AI in investing. He envisioned AI as a powerful and flexible mathematical tool that would become ubiquitous across sectors. Rather than developing proprietary AI solutions, he foresaw companies embracing AI as modular building blocks, assembling components to create customised solutions for their specific needs.

The podcast provided valuable insights into the evolving landscape of AI in investing. Tommaso's perspectives highlighted the transformative potential of AI, emphasizing the need for a harmonious partnership between human expertise and artificial intelligence. As institutions gradually embrace this technological shift, the future of investing appears to be one where AI and human intuition work hand in hand to unlock new possibilities and efficiencies.

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About MDOTM Ltd

Founded in London, MDOTM Ltd is a strategic partner of numerous institutional counterparts to integrate Analytical and Generative AI into their investment processes and develop new solutions such as discretionary mandates, funds, and certificates. Selected by Google and recognised as one of the best AI companies, it has raised over $10 million from institutional investors and finance professionals, making it one of the world's largest firms specialising in Artificial Intelligence for investments. For more information, visit www.mdotm.ai

 

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