PUBLICATIONS

BOOKS

Positive Alpha Generation: Designing Sound Investment Processes

Positive Alpha Generation: Designing Sound Investment Processes

by Dr Claude Diderich | January 2009 | John Wiley & Sons | Chichester, United Kingdom


Dr Claude Diderich describes tools and techniques, which can be used to develop qualitative and/or quantitative investment processes for actively managing investment products. He focuses on how theoretical models can and should be used in practice. He describes the interaction between different elements of an investment process’s value chain in a single and consistent framework. A key focus is placed on illustrating the theory with real world examples. At the end of the book the reader will be capable of designing or enhancing an investment process for an investment or portfolio managers products from start to finish

CHAPTERS IN BOOKS

Strategizing about RoboAdvice

Strategizing about RoboAdvice

by Dr Claude Diderich | to appear 2019 | in WealthTech: Wealth and Asset Management in the Fintech Age, M. Antenenn & P. Schueffel (eds.) | Information Age Publishing | Charlotte, NC | pp. N/A


When talking about the future of WealthTech, the buzzword Robo-Advice is not far away. But what is Robo-Advice? In this chapter, I will review different strategies implemented by Robo-Advisors worldwide. I will focus on identifying key challenges and illustrate opportunities for competitive advantage, focusing on desirability, feasibility, and viability

The Wealth Management Canvas - A Framework for Designing the WealthTech Firm of the Future

The Wealth Management Canvas – A Framework for Designing the WealthTech Firm of the Future

by Dr Claude Diderich | May 2018 | in The WEALTHTECH Book, S. Chishti & T. Puschmann (eds.) | John Wiley & Sons | Chicester, United Kingdom | pp. 260-264


Many WealthTech firms are facing challenging times because they only focus on one property in their business model. Understanding how technology can help investment customers satisfy their needs and fulfill their jobs to be done is key for success and to deliver value. The wealth management canvas provides a framework to support WealthTech firms in designing and validating their business models in a holistic way. It relates innovative technologies to the value proposition and allows defining a sustainable competitive advantage. It is a proven tool for transforming creative WealthTech ideas into viable businesses. It focuses on those aspects that matter most and helps avoid many pitfalls

JOURNAL AND CONFERENCE PAPERS

Understanding the Value of Design Thinking to Innovation in Banking

Understanding the Value of Design Thinking to Innovation in Banking

by Dr Claude Diderich | november 2018 | in Journal of Financial Transformation | No. 48 | pp. 64-73


With the advent of FinTech, the banking world has been confronted with the method of design thinking, a proven method for solving wicked problems. Design thinking unleashes creativity and supports developing innovative solutions that are desirable (customers are interested in buying), feasible (banks can deliver upon the promises made), and viable (banks can make a profit). It puts the customer center-stage, focuses on satisfying customer needs and understanding customer jobs-to-be-done. Through its iterative approach, design thinking delivers differentiated and superior solutions, both from a functional and an emotional perspective. By observing customers in their natural environment, prototyping and validating ideas, design thinking ensures that developed solutions work. This article discusses how design thinking can aid in making banking more innovative

Initiating the Strategy Process Using Design Thinking

Initiating the Strategy Process using Design Thinking

by Dr Claude Diderich | March 2017 | in Change Management Strategy eJournal | https://ssrn.com/abstract=2927941
A preliminary version of this paper was presented at the 36th Strategic Management Society (SMS) Annual International Conference | September 2016 | Berlin, Germany


Initiating the strategy process is a complex undertaking. In this paper, we introduce the concept of “strategic focus”, based on combining the lightweight business model framework with design thinking, defining a foundation or an anchor point from which the strategy process can be initiated. There exist four possible strategy views a firm can chose from, that is, i) being customer centric, ii) focusing on product and service innovation, iii) leveraging existing capabilities, and iv) differentiating on financials. The lightweight business model framework of a firm, competition, and industry allows identifying the key characteristics on which a firm should lay the foundation of its strategy, called the strategy view. Through applying design thinking, the strategy view can be defined with minimal effort and avoids unnecessary preliminary analysis. The proposed approach is easy to understand and apply by board members, executives, and managers not formally trained in strategy development. It focuses on those aspects that matter most and avoids non-value adding analysis

The Min-Max Portfolio Optimization Strategy: An Empirical Study on Balanced Portfolios

The Min-Max Portfolio Optimization Strategy: An Empirical Study on Balanced Portfolios

by Dr Claude Diderich & Wolfgang Marty | September 2001 | in Numerical Analysis and Its Applications, L. Vulkov, P. Yalamov, & J. Waśniewski (eds) | Lecture Notes in Computer Science | Vol. 1988 | Springer | Heidelberg, Germany | pp. 238-245


Modern investment processes often use quantitative models based on Markowitz’s mean-variance approach for determining optimal portfolio holdings. A major drawback of using such techniques is that the optimality of the portfolio structure only holds with respect to a single set of expected returns. Becker, Marty, and Rustem introduced the robust min-max portfolio optimization strategy to overcome this drawback. It computes portfolio holdings that guarantee a worst-case risk/return tradeoff. whichever of the specified scenarios occurs. In this paper we extend the approach to include transaction costs. We illustrate the advantages of the min-max strategy on balanced portfolios. The importance of considering transaction costs when rebalancing portfolios is shown. The experimental results illustrate how a portfolio can be insured against a possible loss without sacrificing too much upside potential

Expert Systems and their Risks: An Ethical Study

Expert Systems and their Risks: An Ethical Study

by Claude Diderich | 1993 | in International Conference on Computer Science, Communication, and Society: A Technical and Cultural Challenge | Neuchâtel, Switzerland | https://ssrn.com/abstract=3071708


During our whole life, even without being conscious of it, we very often must rely on expert systems. These programs have, at one point, to decide without knowing if the made choice will lead to an accurate solution. In this paper we study to what point a computer system may be allowed to take decisions. Furthermore, we are interested in understanding whom to hold morally responsible in case of failure

The results obtained show that even among the computer science community, expert systems, and especially the theory behind them, are not very well understood. We studied the areas in which expert systems should be used by suggesting various scenarios to the participants. Results show that one has to make a clear distinction between life critical decisions, and decisions which are not life critical. The question whether a computer scientist having developed an expert system, may be held responsible in case of incorrect decisions, is investigated

From this study we conclude that expert systems have their place in our society. The fear that exists towards these systems should be reduced by informing developers and users of their possibilities as well as their fundamental limitations. As often as possible, expert systems should be seen as decision making aids or tools instead of replacement of persons