The FinTech MBA: how tech and finance come together at top MBA programs

FinTech MBA

FinTech MBA: Why Should You Consider It?

Disruptive Technology and Finance

Finance has been the most flexible industry and a breeding ground for experiment as an industry with the use of technology. Banking, as we knew in our childhood has changed drastically from the paper use of deposits and withdrawals and long paper trails to keep track of investments. It is the digital era which has transformed the physical into electronic and created new infrastructure for payments, assets and new technologies to serve the retail customers.

Origin of Disruption

When we talk of “disruptive technology”, it is the change in technological landscape which will change the future course of an industry.

The term was coined by Clayton M. Christensen, a Harvard Business School professor in his book, “The Innovator’s Dilemma” (1997) where he predicted the large role technology was going to play in business and finance.  Disruption – can be in terms of how certain processes will be performed, how the operational costs will change and basically how will the world work.

As per the PwC Global FinTech Report 2017,  82 percent of the interviewed companies expected to have fintech partnership in the next three to five years. The fear of losing out to innovators and small agile companies is pushing them to tie up with the innovators and strategists.

77 percent of the companies hope to use blockchain as an integral part of their production and processing functions by 2020. This is the new age disruption caused in 2009 by Satoshi Nakamoto by publishing his paper on blockchain.

As a finance professional as well, the percolation of technology is unmistakable and the smarter move is to get yourself acquainted in the latest technologies that will change the course of industry in the years to come.

B-School Involvement: The FinTech MBA

Many premiere MBA institutes are keeping themselves well-equipped with such new insights and Columbia’s Business School’s 6th Annual Digital Finance Summit is an example.

The two day summit examined the disruptive effects and new possible trends in the banking, fintech sector where applications of mobile system payments, digital financial services, along with crytocurrencies  in the developed and emerging economies were discussed.

Artificial Intelligence (AI) is another facilitating technology which has severe pros and cons under the scanner. Information technology infrastructure and running expenses account for 15 to 25 percent of the total costs of any large bank’s annual budget and they can easily spend around $200 million around it.

Around 18 to 20 percent of the staff is comprised of software or testing engineers who ensure smooth implementation and solving the running glitches of the legacy systems in place.

Companies, specially banks which see potential in these technologies have been pro-active to tie up with Ivy Leagues and A class colleges to open up new programmes for teaching the basics to their students and then be able to hire directly from these.

For example, Cornell FinTech – the business and computer science wing of the prestigious university has been approached by Citibank to train its selected employees and also the students on campus.

Talent acquisition woes are hounding all companies where there is no dearth of graduates but severe lack of capable skills. In the long run, this will help create a sizeable talent pool for companies, but in the short-run companies requires very specific skills in newer technologies.

The New York University started its new course in crytocurrency –“The Law and Business of Bitcoin and Other Cryptocurrencies”.

The focus was to show the treatment and changes of issues in property, finance and contracts and how technology was going to impact them. Similarly, Duke University has started offering its own course called “Innovation, Disruption and Crypto ventures”  for espousing the uses and benefits of blockchain on businesses.

University of California, Berkeley’s Haas School of Business has been exploring the need to include crowd-funding, payments, and currencies in its FinTech MBA course.

MIT has started offering a course called “Fintech Ventures”. Senior corporate officials have also taken up the mantle to train the new breed of fintech graduates such as Marc Hamud, who is a senior vice president at GE Capital, also co-teaches a new fintech class at USC’s Marshall School of Business.

This will help start building the bridge of industry requirement and scholarly aptitude. Students per se are also jumping in this new bandwagon of fintech ventures with more and more students demanding these extra electives along with their regular MBA programs.

Cambridge University has launched various courses for MBA, master and executive students to meet the demand of popular financial institutions.

List of top Fintech programs in the world per B-Schools

1) The Law and Business of Bitcoin and Other Cryptocurrencies – New York University

2) Innovation, Disruption and Crypto ventures – Duke University

3) Fintech Ventures – MIT

4) NYU Stern School of Finance – Digital Currencies and Fintech Entrepreneurialism

5) Bitcoin and Cryptocurrency Technologies (available on Coursera) – Princeton University

Technology like blockchain is expected to cut down the technological costs of the finance industry by $20 billion annually by 2021. Companies need to have a go-to person for this and many such new developments where co-ordination with other functions can be implemented smoothly to give the savings that the industry is predicting.

Final Word

New technologies are here to remain, whether its blockchain, AI, crowdfunding or peer-to-peer payments. Innovation will happen when theory will be applied effectively in the real life industrial scenario with clients and customers and real savings or additional revenue is gained.

As an FinTech MBA student, it will be in your own interest to invest time in such skill-building courses to showcase yourself as an asset to your future employer. Time will bring many changes and the one who can ride the new waves will be the winner.

 

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