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MBA Students Set Their Sights On Fast-Growing Fintech Industry

MBA students in London and New York keen to enter £20 billion financial technology market.

Thu Jul 23 2015

BusinessBecause
The rapid growth of the financial technology — or fintech — sector is not lost on MBA students. A cluster of them have a growing appetite for the nascent industry, worth £20 billion in the UK alone.

The global fintech market has accelerated in investment and exit activity, with new entrants emerging to bite at the fringes of established financial institutions’ business models.

Accenture research published last month showed US fintech investment tripled last year to $9.89 billion. The rate of growth was highest in Europe, according to separate research from March, where the UK accounted for more than $4 of every $10 invested in fintech in 2014.

“This past year marked a paradigm shift in how financial services companies approach and embrace fintech innovation,” said Robert Gach, managing director of Accenture Strategy Capital Markets. “They recognize the vast potential that this strong network provides.”

MBAs are setting their sights on the emerging industry.

Students are showing an interest in digital innovation, “and a growth area over the past year has been the fintech sector”, said Sarah Juillet, director of postgraduate careers at London’s Cass Business School.

At Columbia Business School there are a number of students banking on the intersection of finance and technology, according to Regina Resnick, associate dean for the Career Management Center.

New York, Columbia’s base,  accounted for 21% of global fintech investment last year, according to Accenture research, also conducted with the Partnership Fund for New York City.

Maria Gotsch, chief executive of the Partnership Fund, which invests in local ventures, said: “For fintech entrepreneurs, New York provides key advantages that no other city can match — notably close access to potential customers, and a deep talent pool of individuals with an intricate understanding of the financial services industry.”

Among Columbia’s fintech fanatics are recent graduates Jon Stein, founder and CEO of Betterment, an automated investing service, and Dan Webber, co-founder and managing director at FXcompared.com, a money transfer comparison site that has facilitated $1 billion of international transactions.

They may be motivated by the growing pool of successful fintech businesses. There were 18 fintech IPOs last year and in the first quarter of 2015, according to Mercer Capital research. These include the IPO of LendingClub, the peer-to-peer lender founded by a graduate of HEC Paris.

London in particular has emerged as a fintech hub. Silicon Valley Bank values London fintech at £20 billion.

Mark Davies, employer relations manager at the city’s Imperial College Business School, said: “There has been a very recent increase in interest amongst MBA students in fintech.” Imperial College has a partnered with Innovate Finance, the membership organisation for UK fintech, whose members include IBM and Visa.

London fintech successes include Transferwise, founded by an INSEAD MBA and valued at $1 billion; WorldRemit, incubated at London Business School and valued at $500 million; and Nutmeg, founded by Stanford GSB graduate Nick Hungerford, which in June raised $32 million in venture capital.

Tim Bunting, partner at Balderton Capital, a Nutmeg investor, said: “Nick Hungerford and the Nutmeg team are passionate about making top quality wealth management available to everyone, not just the wealthy. They are the first mover in this area and have grown very fast over the last 12 months.”

Many fintech companies see themselves as disruptive forces in the marketplace.

Yet banks, including Barclays and Banco Santander, have established in-house venture capital funds to invest in fintech start-ups. Spanish Bank BBVA this month said it would “dramatically” boost investment into European fintech, and launch a dedicated team in London. The bank launched a $100 million venture fund focused on the US in 2013.

For a growing number of MBAs, the free flow of capital into fintech coupled with the rapid growth of fintech ventures makes the sector a tempting prospect.

David Lask, an Imperial MBA student and former investment banker with Santander, came to London from Mexico for just such innovation. Seeing fintech grow in the UK capital has persuaded him to export a fintech business back to the North American country when he graduates this year.

“After learning how the finance sector is changing in a fintech hub like London, I wish to apply those ideas in a country where more people need access to financial services,” David said.

Student Reviews

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When I first stepped onto the campus of City, University of London, I knew I was in for a ride - and not just on the Tube! With its vibrant energy and an impressive repertoire of programs, City U became my home away from home. The Journalism program was kind of a big deal. Rumour was that we were the best in Europe! The lecturers were not just experts in their field; they’re practically journalistic royalty. They were invested, passionate, and had a knack for turning the most flat press release into a riveting news story. With their guidance, I’ve learned to navigate the chaotic world of media like a pro. The campus was a melting pot of every culture, being that we had such a diverse international crowd. Being in the heart of London, I had the world at my fingertips - there was always a new corner to explore, a hidden gem of a cafe to discover, or a street performer! City, University of London wasn't just a university; it was a chapter in my life story that I’ll never forget.

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The campus and the people I've met have made it a wonderful experience. I was reared in a small town with a graduating class of only 88 individuals, so moving to City University was a huge adjustment for me. My dorm has more residents than my whole high school combined! I enjoy the atmosphere here, and everyone is so friendly. Outstanding academic options and a stunning campus. Really great from beginning to end. The educators genuinely love what they do, and the students are ready to learn. On or around college, there is always something to do with friends, and the social scene is particularly warm.

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As a student at City university attending Bayes Business School I would totally recommend choosing this university as the experience is exceptional with great social networking opportunities . Professors are significantly helpful, delivering with excellence and professionalism. Everyone is happy to help and make you feel welcomed in such an esteem university as City, offering exceptional development and guidance through out the course.

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