RiskOptima FinTech R&D Corp., the startup to be established within 2020 in Istanbul is getting under way by adopting the Financial Engineering methods developed by Ilkay Boduroglu, PhD for the last twenty years. The advisory board, selected among the founding partners, consists of highly reputable names in their fields. The algorithm, utilized by Riskoptima Forex Trader software, brought its inventor the honor of Nobel Memorial Prize in Economic Sciences in 2003.
Who is Ilkay Boduroglu?
Our founder Ilkay Boduroglu received his Ph.D. in 1997 from Columbia University’s Industrial Engineering – Operation Research Dept. His Ph.D. advisor is Prof. Don Goldfarb. Boduroglu’s doctoral research was related to designing optimization algorithms for massively supercomputers of the time, which had as many as 512 processors. One of the applications that Boduroglu produced from this research was an Artificial Intelligence model that predicted the customers who would cancel their American Express Cards in the near term. Another application was for a large-scale transportation problem similar to that an airline company would need to solve in order to assign planes, pilots, and crew to all the flights as well as determining the routes and schedules for all those routes planes would fly in the next 12 months.
Boduroglu worked in a successful Silicon Valley startup, Demandtec, in the year 2000. Demandtec would optimize prices for thousands of items sold in all branches of a retail chain.
A year after he returned to Bogazici University’s Industrial Engineering Dept in 2001, Boduroglu became one of the founders of Bogazici University’s Financial Engineering M.Sc. Program. He designed and gave the course with the title “Artificial Intelligence in Finance” in 2002, which was quite an early time for such a course.
After having taught in the Informatics Institute of Istanbul Technical University, which housed the first National Supercomputing Center in Turkey, Boduroglu’s research interest became mainly focused on Financial Engineering. Boduroglu published 4 academic papers in this area. He then got out of academia to startup Riskoptima FinTech Research Corp. with several of his classmates from Bogazici University’s Mechanical Engineering Class of ’85.
His main contribution to the software products that Riskoptima produced was to center financial engineering algorithms around Granger-causality and Artificial Intelligence. As seen in the article “What AI still cannot do?” (Posted at our blog site), the AI community has been shying away from introducing causality into AI until very recently. For example, if asked “do storks bring newly born children to earth”, an Association Rule hunting AI code would probably scream “yes” because there is a spurious or deceitful correlation between the increase in human population in a certain area of the world and the increase in stork population. No wonder why Clive Granger won the Nobel Prize for Economics in 2003 with his contributions to econometrics, the most important of which was the concept of Granger-causality.
Ilkay Boduroglu says his model hedge fund is the world-famous Renaissance Technologies, LLC founded by Jim Simons, a professor of Mathematics, in 1982. Simons introduced Artificial Intelligence into Financial Engineering in the 1980s by inviting two Computer Science Ph.D.s from IBM who were experts in AI. Hence, came the success of the Medallion Fund (run by RenTech), which is second to none.