Paolo is a powerful thought leader, academic, technologist, IBMer and entrepreneur that leads important research in the fields or innovation for technology, wealth management, robo advisers and fintech in general applied to investment analytics, decision making, retirement and society. His important thought provoking research and knowledge opens a lot of directions and he defends a post Clayton Christensen idea of sustained innovation that explores a further way to the concept of disruptive innovation. At the moment he runs Wealth Management Investment Analytics - IBM Thought Leadership where he leads with the Cognitive team and others research and investing new opportunities for finance and tech companies.
He is the Author of books about quantitative finance and banking innovation, a proactive IBMer, an Experienced risk manager and an entrepreneur now part of a large corporation. He is a FinTech founder and innovator, a Keynote speaker. He is the author of Modern Portfolio Management: From Markowitz to Probabilistic Scenario Optimisation. PSO is the quantitative heart and soul of Goal Based Investing. In this book he discusses and researches about what truly matters to long-term investors is the probability to achieve their personal financial goals through their life cycle (targets of total return or retirement income), PSO provides the principles and quantitative framework to feature the probability of achieving multi-period financial goals as the objective function, within a scenario-based and risk-constrained optimisation exercise. In this fast forward and powerful thought leader study book he discusses the adoption of Goal Based Investing principles leads to a change in perspective from MPT and is based on the author's research and experience in risk and wealth management. PSO provides a consistent and scalable quant framework to transform Wealth Management and Asset Management practices beyond the limitations of Markowitz and Black-Litterman.
Some of the areas Paolo Sironi highlights:
01 - “Risk manager, FinTech entrepreneur, Thought Leader"
02 - “Actual data, actual clients, actual decision-making"
03 - “Personalisation is mantra!"
04 - "Technology, Demographics, Regulation"
05 - "Is my iPod a Robo-Advisor?"
06 - “Neither Robo, nor Advisor!"
07 - “Cognitive era"
08 - “Robo-4-Advisor, Robo-as-a-Service, Robo-Retirement"
09 - “FinTechs innovate, Banks transform"
10 - “IBM's largest Fintech"
11 - “Investors are not consumers"
12 - “Cybersecurity is high on the agenda"
13 - “Lufthansa is my office"
IntelligentHQ interviewed him and we discussed the following areas:
- Goal Based Investing (GBI) = client at center stage as opposed to market dynamics (asset management perspective)
- Robo-Advisors = new disruptive players threatening banks or forcing financial institutions to change
- Probabilistic Scenario Optimisation = new ways of optimising portfolios with GBI principles
- Robo-retirement = the retirement crisis will be the next and most damaging of all financial crisis we have seen so far. GBI methods can help tackling the problem by helping investors to understand how to make decisions fro retirement.
- Asymmetry of information and banking democratisation = digitalisation, regulation (RDR for example) and Robo-Advisors are empowering clients to be price makers and banks to become price takers of the investment relationship
- Investment behaviour = investing and consuming are not different because when u purchase goods your are happy now but might get disappointed later (after you open the package and play with the tool), when you invest you are unhappy today (because you have to pay commissions) and you "might" get happy at a later unknown date.
These were our questions:
Can you tell us about you, your education and professional profile?
What are your views in wealth Management and Investment Analytics ?
You are the Author of "Modern Portfolio Management: from Markowitz to Probabilistic Scenario Optimisation." can you tell us about this?
Wealth Management and Investment Analytics are going through a huge disruption what are your view about a near future and the shift of wealth and how technology is supporting new and fast changes?
How do you see the progress of robo advisory platforms and software as banks struggle to manage all innovative new disruptions and at the same time wealth is passing hands faster than ever?
How do you see the FinTech world in general?
How do you see the overall Fintech for Wealth Management?
Given banks like UBS spend billions in software and IT how you see innovation coming from big institutions and small startups?
What are the best Market / Counterparty Risk Management tools?
How is IBM posistion in this area? what are its main offers?
Can you tell us about your academic research in these fields?