As part of our Gamechangers series profiling graduates from the global Barclays Accelerator program, we talk to Justin Lyon, Founder and CEO of Simudyne, whose AI simulation platform helps banks to identify and prepare for risks. He tells us about signing a major new deal with Barclays and what he learnt from working for the US Department of Defense. 

Simudyne is a software company that makes it easy for banks to build Artificial Intelligence simulation. Our platform Simudyne SDK allows banks to build models and use advanced algorithms to understand emergent behaviour in complex systems like the financial markets they operate in. To give just one example, our software is able to accurately recreate the inner workings of the UK housing market by keeping track of all 27 million households. Those 27 million households can be encoded with alternative behaviours and bombarded with economic shocks to study the risks that banks run in their mortgage books. Modellers at a bank can build simulations to identify knife-edges of risk in a safe, simulated world and ensure decision-makers better understand how different policies will impact the business.

In the financial world, there are literally trillions of dollars at stake if the wrong decisions are made. It’s the ‘black swan’ event – an occurrence that comes as a surprise – that simulation is really good at. It allows you to keep track of all the moving parts in a market. Our tool is used by the banks to help them with their strategic decisions both in managing and mitigating risks, and taking advantage of opportunities

My drive comes from disappointment at how our leaders make decisions 

The idea for the business came after I started working for the US Department of Defense in Afghanistan and Iraq in 2001. I focused on simulating insurgencies and counter-insurgencies. I moved on to building simulations for gas, oil and insurance companies and worked for the Bank of England for five years. My drive has come from a disappointment at how our leaders make decisions.

At Simudyne, we want to simulate the entire world. The financial sector is just one vertical. We’re going after oil, gas and transportation. We’re building a Star Trek computer. You don’t want something that works one time in 1,000 – you want a strategy to ensure it works 800 out of 1,000 times. And even where it gets it wrong, it should alert you quickly so you can change direction based on new data. Simulation has a proven track record, allowing you to put in place mitigating strategies to prevent the downside. You might lose money but you’re not going to go out of business. 

Simulation allows you to put in place mitigating strategies to prevent the downside – you might lose money, but you’re not going to go out of business 

Barclays’ decision to use simulation as a competitive advantage is just one expression of their focus on innovation. We’ve signed our deal with Barclays and we need to gain good commercial traction. We want to raise significantly more capital, add staff and expand. My dream is that where now people search Google for information, in the next five years they begin to ask Simudyne for answers. We want to get in touch with the consumer. If somebody is buying in a certain area, they could ask Simudyne SDK if the risk is too high – and it might suggest a different area. We’re not building a crystal ball. This is not magic. It’s just applying mathematical modelling to these AIs.

The Barclays Accelerator program was utterly transformational for us as a company. We’ve raised significant capital. I’ve never worked so hard in my life. Even when I was in Iraq, it was not as intense. No one was shooting at me but on the Accelerator nobody would let you say something without challenging it.

I really appreciated Barclays being so open. Normally getting that kind of feedback from a bank is incredibly difficult. In the three months we were in the program, we got more than 100 meetings. You have to be prepared to have your ideas challenged. There were many times when our dreams were crushed. But you had to go back and say: “What’s next?” That sort of feedback for a start-up is precious. As someone born in Texas, I feel perfectly content making fun of cowboy decision-making. Cowboy doesn’t work in the 21st century. You’ve got to be more measured. With what is happening around the world, and the important decisions we have to make, we need simulation technology more than ever.

My dream is that where now people search Google for information, in the next five years they begin to ask Simudyne for answers 

We’re excited to partner with Barclays because it’s an organisation that gets innovation - they actively bring it into the bank. We got lots of feedback from users of our software at Barclays and managed to bring that into our product – and that’s innovation at work. It’s usually hard for businesses like ours to work with banks because they are extremely busy and the chain of command is long. But Barclays, from our experience, embraces innovation and has removed obstacles to get us the right information that helps us iterate at pace.

This kind of close collaboration has allowed us to improve our product and make sure it is enterprise ready. This is a dream for any start-up because how can you understand what the client actually wants if they do not give you constructive feedback? The best products are those that have been tried and tested by real users and from our standpoint, it is in our DNA as a company to place the customer at the heart of that process. Barclays has pulled out all the stops to work with us in that regard. They have been generous with their time and resources and we are very proud to have them as a client.

Our main focus for the future is growth. We are onboarding more clients and raising more capital. Our vision is that every decision of consequence should be subject to a computer simulation. The stakes are too high for us to leave it to spreadsheets and gut feel. We want Simudyne SDK to be the standard for that decision-making process.

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