Spain’s IESE Business School has partnered a plethora of fintech leaders, including current and former executives of JPMorgan Chase and Bank of America Merrill Lynch, plus tech group Microsoft. Its close competitor IE Business School has already joined forces with Spanish bank Santander to help fintech entrepreneurs raise venture capital.
IESE explored topics including digital currencies and “robo-advising”, whereby algorithms assess investors’ risk tolerance and rebalance their portfolios.
“We’re in a new era of robo-advising,” said Claire Huang, former chief marketing officer at JPMorgan, at IESE. “Computers are starting to cut out the traditional human interactions.”
IESE follows a number of top schools teaming up with the likes of Lloyds Banking Group and Barclays to assess fintech innovations. Imperial College Business School joined forces with Citigroup to delve into digital currencies last month. Citi also part-funded the launch of its new financial technology center in London.
“We recognize that to become the leading centre of global fintech you need both intelligence and business acumen,” said professor G Anandalingam, Imperial’s dean. “The new centre will help bring these elements together.”
A few days later Warwick Business School hosted the PayTech Conference in London, where fintech leaders charted the growth of mobile payments with speakers from MasterCard, Atom Bank, and Vodafone.
There has been a payments battle between traditional financial services providers and a new wave of tech entrants, intensified by the launch of Apple Pay.
“Paypal, Apple Pay and Google Wallet have stolen an early march, certainly in the US and Europe, but there are many smaller players with great innovative products,” said Pinar Ozcan, Warwick associate professor of strategic management.
The nascent fintech movement has captured the attention of the world’s biggest banks and other financial players, such is the potential for it to improve services and also disrupt the incumbents.
“Think of somebody working for a bank — the big worry for you is that you have a bunch of legacy IT systems, and there are five people in a loft somewhere who are picking away at one of your core profitability measures,” said Raghu Rau, professor of finance at Cambridge Judge Business School.
According to a new survey from PwC, 95% of banks fear part of their business is at risk of being lost to standalone fintech companies. The consultancy firm cited the blockchain — distributed ledger technology that emerged with the digital currency bitcoin — as a top threat and opportunity for the financial industry.
“Blockchain and disruptive ledger technologies offer a once-in-a-lifetime opportunity for financial services companies to transform the way they do business,” said Haskell Garfinkell, US fintech co-leader for PwC.
“In our view, the lack of understanding of blockchain technology and its potential for disruption poses significant risks to existing business models.”
The moves by the European trio of schools mirror those of top US business schools, which are increasingly embracing fintech in their teaching, and pairing top financial services players too.
A course taught by Campbell Harvey at Duke Fuqua looks in particular at the blockchain. “It is a really innovative idea that has the potential to change many businesses,” he said. Fuqua is not walking alone.
USC Marshall School of Business for instance has partnered with GE Capital to deliver a new fintech course for its MBAs. “Traditionally most business school finance courses focus on the tools required to be successful in true banking jobs” such as valuations and M&A, said Marc Hamud, senior vice president at GE Capital. Yet Marshall’s is focusing on topics like alternative lending and online wealth management.
Antoinette Schoar, professor of entrepreneurial finance at MIT Sloan, said she’s teaching students about designing new fintech ventures, from peer-to-peer lenders to robo-advisors. “A number of students are launching start-ups,” she said.
David Yermack, chair of the finance department at NYU Stern, said the fintech curriculum will have to be taught at every business school. “Students and employers will demand it,” he said. Others agree.
“The role of technology in banking is changing the landscape and our education must change as well,” said Adair Morse, assistant professor of finance at the University of California, Berkeley’s Haas School of Business.
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