Fintech U.: Leading universities increasingly offer fintech specialization
Hundreds of startup entrepreneurs and MBA students will gather with private and public sector leaders later this month in Boston for the second annual MIT FinTech Conference to discuss “Disruption Over the Next Decade”. Investment bankers, insurance company executives, central bank employees, public policy advisors and rising entrepreneurs will spend their Saturday talking about how technology is changing the financial sector.
Organizers say the April 16 event is on track to be sold out, with 450 students and professionals attending, up from 300 last year, as fintech emerges as a more sought-after topic.
“It’s been quite a good ride,” said Jacqueline Karlin, an MBA student and co-president of the Massachusetts Institute of Technology FinTech Club, which is organizing the conference with support from the university’s Sloan School of Management, non-profit FinTech Sandbox and a handful of corporate sponsors, including MasterCard and Goldman Sachs. “It’s kind of the perfect environment here.”
It’s also the latest sign that business schools are joining the developing fintech ecosystem.
The fintech sector, which includes equity crowdfunding, peer-to-peer lending, alternative payment systems, cryptocurrencies and other disruptive uses of technology in banking and financial markets, has grown rapidly in recent years. Global investment in fintech companies in 2015 totaled $19.1 billion, more than double what it was in 2014, according to a report from accounting firm KPMG International and venture capital database CB Insights.
MBA programs offer fintech courses
Now, many MBA programs — from prestigious institutions like MIT’s Sloan, The Wharton School of the University of Pennsylvania and the Haas School of Business at the University of California, Berkeley, to regional and online degree programs– are adding courses and events dedicated to fintech to better prepare their students for a changing financial world and job market.
“Many interesting jobs are being created in this field, and we want our students to have the skills to compete for these positions,” said David Yermack, professor and chair of the finance department at New York University’s Stern School of Business, who teaches a course on cryptocurrencies. “I expect that the fintech field will grow very rapidly. Business Schools will have no choice but to offer these courses, because technology is changing the financial services industry profoundly.”
Citigroup recently forecast that the growing role of technology would eliminate 30% of banking jobs in the United States and Europe over the next decade.
MIT’s Sloan is among the growing number of top MBA programs integrating the fintech sector further into its curriculum. Sloan along with MIT’s engineering department and Harvard’s Law School launched its first fintech course this semester. Entitled FinTech Ventures, the class covers financial technology applications in the United States, including cryptocurrencies, consumer finance and trading systems.
“We thought it was imperative to have a class covering this new trend,” Antoinette Schoar, the Michael M. Koerner Professor of Entrepreneurial Finance, who teaches the course along with Bill Aulet, managing director of the Martin Trust Center for MIT Entrepreneurship, said in statement.
Other business schools offering fintech courses include the University of Southern California’s Marshall School of Business, which says it was the first American program to offer a comprehensive course on the sector, and Duke University’s Fuqua School of Business and New York University’s Stern School of Business, which have introduced courses about cryptocurrencies, such as bitcoin.
From courses to full fintech degrees
Entire degrees dedicated to fintech are still rare. But McMaster University’s DeGroote School of Business recently began offering an executive MBA in Digital Transformation, which focuses on the use of big data to produce analysis and make decisions, along with teaching core MBA courses such as finance and marketing. The degree has several corporate sponsors, including IBM and Canadian bank CIBC, and students complete residencies in Silicon Valley.
Local and online institutions have also shown interest in the trend. The United Kingdom’s Open University, a public distance learning and research university, offers an online course titled “Understanding Financial Technologies.”
Some would like to see more courses in the field, and say it’s something all MBA students should have the opportunity to be exposed to.
“Schools that don’t adapt to changes in the labor market for their graduates are at great risk of having an irrelevant curriculum and seeing their applicant pools vanish,” Stern’s Yermack said.
Fintech clubs fill the gaps
While many business schools have yet to add fintech classes, clubs have formed on campuses to explore the sector and hold conferences and contests.
Wharton FinTech, which was founded a few weeks before the MIT club last year, bills itself as “the first student led fintech initiative,” and aims through events and conferences to educate students about the emerging industry as well as connect graduates with jobs. Like other fintech clubs, it has corporate sponsors, including CommonBond, which offers student-loan refinancing.
From recruiters’ perspectives, most students interested in fintech end up at startups rather than in the research and development arms of investment banks and other traditional financial companies.
“There are limited opportunities in fintech at consumer and investment banks,” said Regina Resnick, associate dean of the career management center at Columbia Business School. “There are also independent fintech startups and growth companies that provide most of the opportunities.” Automated investment service Betterment and FXCompared, which aggregates fees for international money transfers, are two startups founded by recent Columbia Business School graduates.
Although courses and clubs dedicated to fintech vary from one university to another, the growing interest is clear. Some MBA students say the sector has reached the mainstream.
“Until about six months ago, every time I met someone I had to explain what I did and what is fintech,” said Karlin, who interned last summer as a senior product manager at Amazon Lending and will work there when she graduates later this year. “Then suddenly, it has become a very popular theme. We have a lot of support and everyday we get a new student interested in the club.”