IE School of Science & Technology and UC Berkeley ME Department Partner to Advance Digital Twin Simulation for Financial Systems
International collaboration explores the use of digital twin models to analyze and improve performance and risk in financial systems.
IE School of Science & Technology (IE University) and the Department of Mechanical Engineering at the University of California, Berkeley have launched a collaborative research initiative to explore the application of digital twin models to financial systems.
The project, part of the IEX Research Xcelerator, aims to design and test new simulation approaches for capital markets using the same types of modeling tools that have advanced sectors such as manufacturing, aerospace, and energy. By developing a system-level view of financial networks through digital twins—real-time virtual replicas of complex systems—the project seeks to improve how financial performance and systemic risk are understood, tested, and managed.
The collaboration is led by Professor Tarek Zohdi, Director of the Multiphysics Simulation and Optimization Lab (MSOL) at UC Berkeley, and Professor Ikhlaq Sidhu, Dean of IE School of Science & Technology and holder of the MEFIC Chair on AI & Data-Driven Financial Investments. It marks the first formal research project developed under the MEFIC Chair, launched earlier this year to support interdisciplinary research at the intersection of AI, finance, and complex systems.
Professor Zohdi, whose work spans cyber-physical systems, investment science, and digital twin technologies, emphasized the potential of the collaboration:
"Digital-twin technologies give us the ability to anticipate, not just react. By replicating complex systems virtually, we can test policy decisions, design resilient infrastructure, and reduce exposure to systemic risk—before adverse consequences materialize. Collaborating with IE University through the IEX initiative offers a rare opportunity to bring this work into a global context in order to connect advanced modeling with real, measurable effect."
Dean Sidhu added:
"We look forward to working with Professor Zohdi. His systems approach to modeling aligns with our vision to advance theoretical research while building tools that directly impact industry and society."
The initiative will also see Professor Zohdi join the IEX Think Tank—an interdisciplinary faculty group focused on innovation in areas such as the hydrogen economy, digital agriculture, satellite-based telecommunications, and wildfire resilience.
The research will explore simulation prototypes for use cases including financial contagion, decentralized treasury operations, real-time liquidity routing, and the digital trading of physical assets. By integrating AI, machine learning, and optimization into these virtual systems, the project aims to develop tools that support faster, more informed financial decision-making under complex conditions.
About Mechanical Engineering at UC Berkeley
Berkeley Mechanical Engineering is one of the top-ranked public mechanical engineering programs in the United States and is consistently recognized among the top mechanical engineering departments in the world. Its teaching and research labs are among the most active and productive globally, driven by faculty and students from diverse backgrounds who represent the best in the field.
About IE School of Science & Technology
As a forward-thinking polytechnic institution, IE School of Science & Technology integrates deep technical expertise with a strategic business perspective. Unlike traditional tech schools focused solely on scientific discovery, IE School of Science & Technology builds on IE University’s entrepreneurial heritage, approaching innovation through a technological and business lens.