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Business Schools Bring FinTech Into The MBA Classroom

Business schools are rolling out classes in financial technology – as a surge in investment has allowed financial services companies to expand the fintech market.

Tue Sep 23 2014

Business schools are rolling out classes, events and competitions in the field of financial technology – dubbed “fintech” – as big banking corporations and a host of start-ups begin to revolutionize the financial services sector through tech.

From Chennai to Florida, leading business schools have begun incorporating fintech into their MBA classes as technology begins to radically alter the financial sector – a bastion of business graduate employment.

Nanyang Business School in Singapore runs a master’s of finance aimed at the high technology finance industry, in collaboration with the US’s Carnegie Mellon, while Virginia University's business school runs a financial technology program with tracks in financial engineering and actuarial science.

Other US business schools have set-up financial technology centres, including Texas-based McCombs School of Business’s Financial Trading and Technology Center, which has become a focal point for finance programs for its MBA students.

And the Madden School of Business in New York appointed a director of financial technology – John Hunter, a financial services sector veteran of UBS and Morgan Stanley.

Investment in fintech companies has increased by more than 200% globally since 2008, according to Accenture data, while fintech firms in the UK and Ireland have raised nearly $800 million from investors – an increase of more than 600%.

Such increases are likely to lead to a spurt of hiring at fintech SMEs, as well as at established financial services companies. Jean-Eric Pacini, head of structured equity distribution for EMEA at BNP Paribas, said France's biggest bank looks for new talent “who can drive changes in the digital space”.

“BNP sees too many people with limited skills. They are looking for people with a holistic skillset,” he added.

The fintech sector is innovating money transfer, asset management, crowdfunding and even mobile payments – Apple is hoping to upend the payments industry with financial technology in its iPhones, which has seen the largest US banks join its new Apple Pay service.

The proliferation of smartphones in particular has made consumers demand more convenient financial services products.

Last year, more than 12 million people in the UK downloaded banking apps, and conducted 18.6 million transactions a week on their mobile phones – more than double the rate for the previous year, according to the British Banking Association.

Banks have had to adapt. In 2012 Barclays, for example, launched Pingit – a smartphone app that lets any UK banking customers send money to one another using a telephone number, which has proved popular with corporate clients.

Some fintech start-ups are hoping to rival the dominance traditionally exuded by the biggest banks. FundingCircle, an online crowdfunder, raised $37 million in investment last year to expand into the US, and is gearing up to move into property finance.

Financial technology has made its way into business schools in other ways. Cass Business School’s Cass Entrepreneurs Network ran an event focused on opportunities in fintech last year, which was chaired by Eric van der Kleij, head of the London fintech accelerator Level 39. Speakers included Michael Laven, CEO of payments company Transferwise which is backed by Sir Richard Branson, and Rhydian Lewis who is CEO of RateSetter, the peer-to-peer lender.

Cass follows early movers such as India's Institute for Financial Management, which runs a diploma program in financial technology management, which is backed by financial software solutions company Polaris.

Polaris CEO Arun Jain said at the program’s launch: “Business schools typically focus either on finance or on technologies... This initiative fills a gap by addressing the issue of how technologies can best drive optimisation in the financial world.”

Other schools run fintech competitions for MBA students. The University of South Florida’s business school held a fintech business plan competition last year, allowing MBAs to compete for $15,000 in start-up capital.

MBA students from Washington University’s Olin Business School developed a business plan for SixThirty, a fintech accelerator in St. Louis, last year. Several other Olin students helped find and vet fledgling fintech companies for the incubation program.

“The industry seems ready to transform, and we are going to help play our part,” said Eric from Level 39.