This next “inside” piece features a London-based startup, building a new financial ecosystem poised to change the way we invest our money. What’s their story? Read on and find out!
The challenge of navigating the investment market
Finding good investment opportunities can get complicated and expensive. The proliferation of information has made it such that the amount of data sources and ‘expert analysis’ to be consulted is countless. Unless you have a million euros to invest (and banks are flocking to give you FREE investment advice) making sound investment decisions can be a real pain for retail investors.
How then, do you find useful resources in the crowd of information that you get? How do you navigate a reactionary market? Which investment strategy best suits your profile?
On the other hand, it has also become increasingly hard for small investment management funds to go to market, meeting investors’ expectations. Unlike their more established, traditional asset and wealth management counterparts, smaller funds don’t have the technological capabilities (AI / robotics) required to automate the investment strategies and better serve their customers.
Realising these pain points in the market, Stefano Campana, and Luca Campana the two co-founders of Robolab came up with an end-to-end solution that connects the communities of sellers and developers of the investment world, to the retail investors – in a way that has never been done before.
RoboLab’s offering is two-fold, impacting the entire investment value chain
The Robolab Developer platform facilitates a sellers’ (the financial engineers and developers) prototyping of investment strategies. This happens through a hosted research & development environment where users will be able to create automated robots and backtest them over years of market data. What’s more, users will be able to deploy deep-learning without any infrastructural or automation complexities. In other words, you’ll be able to activate your investment robots round the clock and monitor their activities and performances in real-time. When this strategy is verified as satisfactory by Robolab, the listing is authorised to go directly into the Robolab Store (essentially a marketplace, just like the Apple App Store or Google Play Store)
“The uniqueness is that we are creating an end-to-end solution, which spans from the creation of the product to the actual marketing of the product. We have a platform as a service that is fully integrated with the marketplace. In a click, the financial product you create is available to the client. This type of system doesn’t quite exist yet in financial services – and even more so in investment management, where the barriers are even higher.” – Stefano Campana, Founder at Robolab
The Robolab store
This store is designed to make things easier, and more tailored to the interests and preferences of retail investors. Whatever your investment profile, Robolab will find the best-matched robots (powered by the same AI technologies used by the likes of the Goldman Sachs & BlackRock of the world) that suit your preferences and activate them on your account. Retail investors will be able to easily follow their investment performances (with advanced, real-time risk and profit analytics), and increase/decrease/deactivate their investments in a particular robot or even switch from one robot to another, whenever. The Robolab assistant is also always on hand to answer any questions.
At the moment, Stefano and Luca have initiated their mobile MVP and are set to launch their Developer platform in March this year. The team is also testing the mobile application with 50 beta testers and have used their developer platform to automate investment strategies for four small investment companies.
Robo-advisory is trending in the Financial Services industry. Incumbents have started developing their own models and solutions and utilising robo-advisors to serve retail clients. Startups too are active in this space. Robolab however, is one step ahead of rest, because their robots actually do the investing.
“The Robolab store doesn’t just provide ‘advisory’ services – we’re not looking at your profile and simply telling you, that should buy ‘xyz’. The robots are executing (or trading) for you. As a customer, you’re usually not able to decide the instruments, the horizons (etc) of your investment, if you use a robot. But the future will be that you can play a part in the creation of the strategy. If you’re passionate about fashion or sustainable business or luxury, you can have a chat with us and say – ‘Robolab, I’d like a robot that invests in the luxury industry’.” – Stefano Campana.
Another great pull here is that with Robolab, it will be 75% cheaper for retail investors to invest in the stock market and it will be at least 50% faster for businesses to go from creation (prototype) to the deployment of an investment strategy. Right now the traditional process can take up to 2 months, but with Robolab’s set up, the process will take just days. The Robolab store also makes investing, a ‘fun’ experience, as investments are linked to each investor’s passions and objectives, making them feel more connected with their portfolios.
“We launched our MVP with just the 2 of us. But what you have to realise is that we have a solution that is working with real money – yes, it’s an MVP but it’s not a concept per se because it works with real money. It’s not like any other concept where you don’t risk a lot. With us, we had to prove the value proposition by involving transfers of money. That’s quite a big ask. I think that is what I would say has been our biggest accomplishment – the 2 of us replicating the capabilities of an actual investment bank or fund. Moreover, Robolab has AI and machine learning capabilities – something not all established investments funds have developed!” – Stefano Campana
The Road Ahead
Campana brothers’ mission in creating this investment platform is also to empower the new generations of data scientists or financial engineers to develop new business through Robolab. There are similar ecosystems out there – the Apple App Store or other tech platforms for FMCG, for example, where you can start a small business and grow. In the financial services ecosystem, however, there isn’t quite a platform like that yet.
According to their plans, 2019 is the year that will see the launch of Robolab’s end-to-end investment solution. They’ve started working towards this target by firstly focusing on acquiring small investment funds. Stefano and Luca are currently in talks with a London-based investment fund managing £250m and an investment advisory firm in the Americas to co-create automated investment strategies using AI and ML technologies. Also in the works: getting on board about 15 retail investors as early adopters and setting up Robolab’s risk and compliance operations to launch the company sometime in September.
“I saw a real opportunity to connect and collaborate with Startupbootcamp’s portfolio of partners. There are other programs out there but they don’t have such a strong proposition as SBC in terms of their partners. I believe FinTech is moving differently than the other industries. You must have the appropriate experience and expertise – and it is a highly regulated industry so you really need to know the business. Technical expertise is one thing, but you also need to know how the financial services industry works and to navigate the regulations and compliance rules that are there, in order to make a real impact. It’s a complex game to play. You have to find your position in the value chain and collaborate with the larger financial institutions to utilise the industry infrastructure efficiently while having a more customer-centric approach. And I saw the opportunity to do so, through this program.” – Stefano Campana
Demo Day for the FinTech & CyberSecurity Class of 2019 is on 14th February. Tune in to the livestream at 14:15CET, to catch Stefano (together with 11 other companies) pitching on stage at the Rabobank HQ in Utrecht!