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Fintech is all the rage in US business schools

MBA students are signing up for courses on financial technology as it becomes more key to hireability.
BY Uttara Choudhury |   12-12-2017
Photoillustration of suited arms with palms upturned, holding laptops and mobile devices

After the 2008 financial crisis, Paul Volcker, the former US Fed chief, quipped that the only important innovation the financial industry had come up with in the prior 20 years was the ATM. Fast forward to 2017: almost everyone is using smartphone banking services, cryptocurrencies are booming, while banks are pondering how to conduct transactions on decentralized blockchains. Right on cue, students are clamoring for courses on financial technology to increase their hireability.

US business schools are pulling out all the stops to teach students about the future of finance and its intersection with technology. Fintech is one of the fastest growing segments of the economy as it covers tech-enabled business model innovation disrupting the financial services industry.

 
Stern was early to market
Not surprisingly, New York University’s Stern School of Business, known for its academic strength in finance, was one of the first to expand its MBA curriculum to prepare students for jobs in fintech as the finance industry faces one of the biggest disruptions in its history. Last year, Stern’s full-time and part-time MBA students could choose fintech as a specialization, and take electives from a menu of eight new courses.

“Technology continues to transform the business landscape at a breathtaking pace,” noted Raghu Sundaram, Vice Dean of MBA Programs and Online Learning. “Business education needs to innovate to keep pace with the rapid rate of change.”

Stern was early to market with an initial business school course on Bitcoin, offered in the Fall of 2014 and co-taught by NYU Stern Professor of Finance David Yermack.

“Jobs have changed at the big banks, which are increasingly interested in people graduating with skills in big data,” Yermack told “Business Because”.

“Artificial intelligence and machine learning are changing the profile of finance jobs and the nature of work, which will increasingly focus on programming these machines and pointing them to the right data, and working on hardware and software updates. In five to 10 years, every student who wants to build a finance career will need to study this material,” he said.

Fintech is listed among over 20 specializations currently available in the NYU Stern MBA curriculum. Students doing an MBA in general management in Stern can select up to three specializations — or choose not to specialize at all.

 
Driven by student demand
In August this year, Stanford University and Georgetown University business schools offered fintech courses to MBA students for the first time. They joined the Wharton School of the University of Pennsylvania, the University of Southern California’s Marshall School of Business, Duke University’s Fuqua School of Business and Columbia University, which all launched similar programs in recent years in response to surging demand from students.

“For fintech, some people mean bitcoin and cryptocurrencies; some people mean the technology JPMorgan uses for trading,” Angela Lee, Columbia Business School’s chief innovation officer, told Reuters. “Everyone thinks it’s sexy, and a lot of people use it colloquially without knowing what it is.”

Broadly speaking, examples of innovations that are central to fintech include cryptocurrencies and Blockchain, the technology behind Bitcoin, digital advisory and trading systems, artificial intelligence and machine learning, peer-to-peer lending, equity crowd funding and mobile payment systems.

Since it’s all relatively new, university’s say there is no ready-made teaching material so they have tried to build their own curriculum and develop real life cases. Instead of developing traditional syllabuses, universities are showing students how markets are disrupted by new technology, and helping them develop business ideas.

Since MIT Sloan focuses on invention, its high-profile “Fintech Ventures” program gives student teams seven weeks to develop business plans in the fintech space, in the areas of consumer finance, payments, trading and cryptocurrencies.

 
Blockchain and the future of technology
Computer science classes cover the bits and bytes behind blockchain, but it’s tough to find a course that actually demystifies the disruptive business, legal, and regulatory implications of the new technology. That’s about to change. In Spring 2018, University of California’s Haas School of Business will offer a cross-listed class   Blockchain and the Future of Technology, Business, and Law to business, engineering and law students.

The class will be made up of 60 students and will be limited to 20 students each from the Haas School of Business, Berkeley Engineering, and Berkeley Law. They’ll work in mixed teams of six to draw up a business plan for a workable blockchain related business. Judges from San Francisco’s venture capital community will evaluate the students’ pitch decks and their computer code, as well as their legal memos.

“Blockchain is one of the most significant technologies to impact business in many years, but there’s a lack of understanding about what it means to business and law,” said Haas Lecturer Greg La Blanc, one of the co-founders of the popular Blockchain course.

“Engineering students think that money simply grows on bits, but have no idea what the business model is. Law and business students are confused about the technology.”

Interest in the course and in blockchain across the University of California campus is strong. “Blockchain at Berkeley,” created barely a year ago, now has over 1,600 students participating in the club’s activities.

On the East Coast, MIT Sloan professor Simon Johnson has stepped up MIT Sloan’s blockchain offerings with a new independent study course and a re-tooled existing course that examines blockchain’s implications for economic and financial development.

 
Uttara Choudhury is a writer for Forbes India and The Wire. In 1997, she went on the British Chevening Scholarship to study Journalism in the University of Westminster, in London.

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