Coming from a family of entrepreneurs, Furio Pietribiasi, managing director of Mediolanum Asset Management in Ireland, still wonders why he never took the step to set up his own fintech startup. “I guess it’s because Mediolanum has given me the freedom to express my entrepreneurial spirit for more than 20 years,” he says. “The only difference is that it’s not my company.” By Aggelos Andreou with photos by William Copico
“When they told me nine years ago that I was set to be the CEO for Ireland, my first reaction was ‘Oh my God,’” Furio Pietribiasi says. He was thrown into the abyss of the first financial crisis of the 21st century, taking on the reins of Mediolanum Asset Management at the same time that Lehman Brothers went belly-up. His task was to protect the Irish fortress of one of Italy’s most prominent financial institutions.
“Markets were in total despair,” he recalls. “They were crashing, and we didn’t really know how to protect our investors’ assets. Banks were not returning calls, most of their staff was laid off, and the rest were afraid to talk. Every day someone would get busted, so you were chasing the money for your clients and trying to keep their assets safe.”
The global financial crisis was a massive learning curve for everyone, but for Pietribiasi, it was also a dramatic self-learning process and a heavy weight on his shoulders. “I had just taken on a big job without knowing how the crisis was going to end, trying to resolve the situation without having a clue how to do that,” he says.
Pietribiasi survived because, he says, he used common sense. “In critical situations like these, you have to apply common sense to everything you do and avoid being carried away by your emotions,” he says.
This meant that he and his team had to work long hours—they spent many nights trying to deal with emergencies popping up again and again. “There was a lot of brainstorming and decisions had to be made quickly; I was lucky to have the support of my team and the trust of our shareholders,” he adds.
The financial crisis led to an evolution in the capital markets industry. Pietribiasi feels that the domino effect is still traceable today and that these apparently neverending changes are the new normal. “You have to live with this new reality where returns are not what they used to be, and you’re always preoccupied with fixing, rectifying and adjusting to new regulations and new market infrastructures,” he says. “Keeping, developing and growing the business is the new normal, so you have to work relentlessly to preserve and generate returns for your clients for the assets they want to invest. That’s why innovation and technology is a critical part of today’s financial world.”
Pietribiasi says that one of the reasons he and Mediolanum survived the crisis is the entrepreneurial culture the firm has adopted since its founding in 1982. “The pressure has not diminished, even now, so we take a lot of new initiatives to cope with the changes in market conditions and to be in line with the rest of the group’s history and attitude throughout the years,” he says.
When Pietribiasi assumed control of Mediolanum, he embarked on a transformational technology journey in order to cope with the changing nature of the industry, taking some initiatives previously unknown to the buy-side community. He considers this journey to be the biggest and most ambitious project he has ever worked on. He says it was a necessary step in order to differentiate the firm’s business in Ireland and to satisfy Mediolanum’s innovation mindset. He decided that Mediolanum needed to start doing things differently from what many other asset management firms were doing at the time.
But Pietribiasi is the kind of entrepreneur who sees technology solely as a service to the financial industry. “Innovation is an overused and often misused term, and many people don’t understand why technology exists,” he says. “If an innovative tool is not helping to generate returns or fundamentally improve our services, then it’s not worth labeling it as that. Technology exists not just for the sake of existing but because it can help us grow substantially.”
Mediolanum’s journey kicked off with the introduction of its big-data strategy. “We were trying to do what nobody else had tried. I am not sure if we did that out of ignorance or whether we were really innovative,” he jokes.
The team developed its data warehouse over a number of years, distributing and organizing data for all business functions, from investments and operations to marketing and sales. “We have developed a pretty unique system,” Pietribiasi explains. “From an investment perspective, 92 percent of our processes are automated.”
Once the data infrastructure was up and running, the firm’s focus turned to analytics. “We started from basic analytics, which enabled us to elaborate on a lot of data and to have a representation of the available information,” says Pietribiasi. “We then moved to data visualization where we managed to get some more diagnostic analytics, and now we are working on the predictive side of data analytics.”
For this last part, Mediolanum developed proprietary machine-learning algorithms that now provide it with the ability to drill down into clients’ behavior. The technology was developed in partnership with the Irish Centre of High-End Computing (ICHEC), a research center in Dublin, specializing in machine learning. “This partnership was really important because now we are looking at the behavior of our investors to understand what kind of behaviors are more rewarding in terms of revenue and which are more penalizing,” says Pietribiasi. “With this technology, we are also trying to predict investors’ behavior within a fund or to trace any potential activity that could lead to losing or generating returns.”
Mediolanum also developed a feature where portfolio managers ignore the firm’s best performing funds, “because if the investor has the wrong investing attitude and sells when the market goes down and buys when it rises, then technology can’t do anything to save their returns,” Pietribiasi says.
The firm has also developed an “intelligent investor strategy program,” which increases investment instalments depending on the market’s volatility. “I think we can go beyond that and do something even smarter in the near future,” says Pietribiasi. “Artificial intelligence (AI), for example, is something we are currently working on and trying to develop some tools to boost our business.”
So far, this tech journey has proven to be a long process, which Pietribiasi describes as the “most exciting” part of his job. “It is a long journey and because of its uniqueness we had—and still have—pitfalls and a number of delays,” he says. “Between the conception and the designing and the actual implementation of this project, there have been many sleepless nights. But it’s all been worth it.”
Embarking on a firm-wide technology strategy is the easy part, according to Petribiasi. The challenge is to maintain momentum and ensure that people do not retreat and go back to being just an office of portfolio managers. The key to ensuring success is technology, he says. “We started this journey because reality caught up with us—it’s not like I woke up one day and decided to do it,” he says. “Now, the real challenge is to maintain this technology culture, and to do that, every firm needs to educate senior managers on what the technology could bring to the business.”
Mediolanum holds regular training courses around technology, both on a team and an individual basis, using its all-pervasive tech culture as a way to raise the bar for everyone. “We are not just throwing money at technology just to say we’re cool—we do this because it’s good for business,” says Pietribiasi. “We have a group of data scientists working across the business bringing knowledge and experience while providing training to the senior management teams.”
He says millennials can offer insight into the scope of what new technologies can offer. “For example, we use AI, which provides us with faster and more accurate insights on investment strategies; so everyone needs to understand that this technology is not making a decision on your behalf and then you just press a button and make money—it just reduces the fallibility in decision making,” Pietribiasi explains.
According to Pietribiasi, the lack of senior management training has led to the asset management community falling behind in the technology race, where banks already have the upper hand. They have been at the forefront of innovation for many years, while the buy side still struggles to follow suit. “Banks have two good reasons—one external and one internal—to turn to technology earlier than us: consumer behavior and margins,” he says. “First, technology started to become part of everybody’s life; it provides real-time service, it’s everywhere, and it’s cheap, so banks being the first contact point with the financial world had to adapt to this new reality to keep their customers engaged.”
Pietribiasi adds that margins were the catalyst in changing fundamentally how banks operate. “In a technology-driven world, banks realized that their physical branches cost a lot,” he says, “They had to find ways to interact with the clients without their branches, as costs were heavy and margins were killed because for years interest rates were zero, flat or negative. It was merely an old-fashioned way for banks to make money and they had to find more efficient ways to operate.”
The problem is that everyone has a bank account, but few people have insurance and even fewer have investments. “Asset managers, until recently, didn’t feel that pressure, either from their clients or by way of margins,” he says. “Only now are they trying to leverage technology because their own clients require the same level of transparency, the same real-time information, and the same user-friendly approach as the banks.”
The second technology driver for the buy side is that due to the global financial crisis and the escalation of regulations across the globe, it has become extremely difficult to generate returns. “The accounting standards are more efficient, making company prices available to everyone. They have practically eliminated the advantage of information,” he says. “That’s why asset managers now realize that they need to anticipate things in a smarter way and utilize their data, and the only way to do that is by using new technologies.”
The utilization of data is for Pietribiasi the future of asset management, which will eventually change the face of the buy side. “Big data is certainly something that will change the industry,” he says. “The application of predictive analytics is going to enable us to reorganize the processes within the organization because there is a tremendous need for scalability.”
He also believes that robotics will transform the industry if people are able to realize the technology’s full potential and fully grasp its simplicity. “If you know Excel, you understand that macro in Excel is a very basic thing to master. Robotics is that macro across different applications, which will have a big impact on certain processes,” he says. “Robotics can have a profound effect not only on developed economies but also in emerging markets where lots of jobs have been relocated.”
Ultimately, he says, every new technology can make its own contribution to the financial services industry, as long as people know how and when to use it. “People are afraid of this new era of technology in finance, and I can understand that,” he says. “But that’s a path that we can’t avoid anymore because things are already changing.”
For a man who appears to be so much into innovation and who undoubtedly understands the value of technology, one has to wonder why Pietribiasi hasn’t been more involved in the fintech scene. It turns out he is. Besides being a busy managing director, he is also involved in a number of different activities around fintech, as well as mentoring startups and is a member of a number of boards in Ireland. “According to my wife, I do a lot of different things,” he jokes. ““I have no plans at all to leave Mediolanum but if I ever did, my alternative is to follow the family tradition, become an entrepreneur, and set up my own company.”
The only issue with that plan is time. “When you’re young, you need to gain more experience, and there is always time before you take the first step,” says Pietribiasi. “When you are 46, and you have been lucky enough to lead a business, time is scarce, and you think you might want to do it sooner rather than later, but that doesn’t mean I ever will and for the foreseeable future my sole focus is on Mediolanum.”
Name: Furio Pietribiasi
Title: Managing director at Mediolanum Asset Management
Hometown: Treviso, Italy
Education: Master’s degree in finance and economics
Anthony and James examine some of the key themes that will be on display at the inaugural North American Innovation Summit.Subscribe to Weekly Wrap emails