If a room full of MBA interns from Harvard Business School, Pennsylvania’s Wharton School, Chicago’s Booth School of Business, and North Carolina’s Kenan-Flagler Business School exists somewhere, it’s easy to imagine that room in some big bank high-rise. Indeed, earlier this summer, that room did exist. But it was in the massive open workspace on the sixth floor of a brick New York City building in the SoHo neighborhood — and the MBAs weren’t working for a big bank. They were working to disrupt all the big banks.
Part of the CommonBond summer internship program, the four MBAs were whittled down from an applicant pool of more than 200 for the coveted positions at the lending-focused financial technology (fintech) startup. To be sure, CommonBond built an intern dream team of sorts. Between the four of them — three finance-heavy and one software expert — their resumes boast Google, Bain, JP Morgan Chase, Prospect Capital Management, and CA Technologies. But now they’ve all got their sights set on the rapidly burgeoning fintech sector.
“The exposure that we’ve gotten this summer to high-level strategy, the executive team, and all the departments in the company has been impressive,” says Marissa Kaplan, the HBS representative of the group. “When you work for a company like that, you feel like you have a real impact. And it’s hard to imagine going back to a larger company where you’re only looking at a small piece of the strategy or effort.”
MULTIPLE B-SCHOOLS NOW OFFERING FINTECH-SPECIFIC COURSES
Kaplan’s sentiments sum up the growing infatuation of MBAs for fintech. For MBAs with a passion to innovate, launch, and be entrepreneurial in a low-risk environment, it’s an attractive avenue. And that attraction is leading to curricular and c0-curricular shifts at the MBA level. Last autumn, MIT’s Sloan School of Management rolled out the first-ever fintech ventures course in MBA curriculum in the United States. According to Antoinette Schoar, a professor of finance who co-leads the course, the creation of the class was a direct result of “tremendous interest” on behalf of current students. “Once we gauged the interest in that topic, it was immediately obvious that MIT is the perfect place for such a class, since we can bring together the finance expertise with the technical depth,” Schoar explained in an email exchange with Poets&Quants. Set up for students to create business models for fintech ventures, the class is intentionally interdisciplinary, drawing on students from Sloan, MIT’s computer science and engineering departments, and even Harvard Law School.
“We have found that the interdisciplinary approach of teaching this material, in combination with a class setup in which students work in teams to come up with new business plans built around a fintech idea, creates great motivation for students to dive deeply into the material and explore the industry from a number of different perspectives,” Schoar continued in the email. “For example, understanding business models, industry dynamics, the incentives of all the players in the industry, and regulatory structure.”
Last spring, schools like UC-Berkeley’s Haas School of Business and USC’s Marshall School of Business rapidly replicated their own versions of fintech courses. And NYU’s Stern School of Business has taken a massive step past the others by creating an eight-course fintech specialization kicking off this fall. According to a spokesperson from NYU Stern, the fintech specialization has consistently been a top five viewed specialization — out of 25 specializations — since announcing the track this past June.
ROBUST STUDENT CLUBS DRIVING INTEREST
Fintech’s rise, of course, has to do with a a technological detonation in a financial industry that went decades without much innovation. And now B-schools are answering the call. “There’s been enormous amounts of innovation in the past 10 years in the way we communicate and connect with each other, largely driven by companies like Facebook, Twitter, and Instagram,” explains Andrew Chang, who graduated with an MBA from NYU Stern in 2011 and is now the chief operating officer at itBit, a blockchain-based financial solution platform. “Financial services is just starting to go through that same major technology revolution right now.”
Like MIT Sloan, curricular additions either in place or on the way have stemmed from co-curricular and student interest. Wharton created a fintech club in 2014 that has quickly become one of the most popular clubs on campus. Stanford’s Graduate School of Business followed soon after with a similar club for the entire university. At Columbia Business School, not only was a club established last year, it has already merged with and replaced the once-massive and long-standing Sales and Trading Club, says Jennifer Merchant, senior associate director of Columbia’s Career Management Center. “It was almost like fintech acquired the Sales and Trading Club, which was, to me, a sign of a change in student interest and where different jobs are going,” Merchant tells Poets&Quants, noting the club was thriving in 2001 when she graduated from the school with her MBA. “Now the major banks are not hiring for that space that much anymore from the MBA level. A lot of jobs are going the route of fintech.”
Columbia FinTech Club co-founder Charles Pippen says the acquisition of the Sales and Trading Club is “emblematic of what’s happening on Wall Street.” Fellow co-founder Gustaf Ericson says 15 years ago the Sales and Trading Club was “the place to be” for both MBAs and recruiters. The duo founded the club right after arriving on campus as first-years last September to be the main hub for the “sprouts” of fintech offerings across campus. Drawing students from the engineering and data sciences departments at Columbia, the two say direct membership of the club was more than 200 students. “Cross-pollination” across schools and disciplines within a university is key to successful fintech development, the two believe, which was reflective in their club and the course at MIT Sloan.
COMMONBOND’S ‘STARTUP WITHIN A STARTUP’ APPROACH
Indeed, big banks are trying to catch up — both in innovation and hiring — with upstarts like CommonBond and its competitors, SoFi and Earnest, which also were founded by MBAs. But the advantage startups have over established players, Merchant explains, is their inherently entrepreneurial environment. “I think anyone who has a bent towards something entrepreneurial and not wanting to work in a traditional, corporate structured environment are being drawn to the space,” she says, adding that she sees a particular interest from MBAs in previous product manager roles. “They have a passion for being in an entrepreneurial environment. They want to be in a space where they are changing things and innovating.”
CommonBond’s internship is set up to meet those requirements. Marketed as a “startup within a startup,” the objective for the summer is to create a product and successfully launch it. “It was like being an entrepreneur without all of the risks,” Kaplan, who was a private wealth management analyst at JP Morgan Chase before HBS, says of the summer. Team members were able to work together in a controlled environment and experiment, Kaplan, 27, explains. Obviously the team was unable to delve into much detail on what, exactly, they were launching, but they had input on everything from user research to product design to financial modeling and the eventual go-to-market phase.
According to Phil DeGisi, CommonBond’s chief marketing officer who holds an MBA from Dartmouth’s Tuck School of Business, the internship has two broad purposes. CommonBond wants to provide a high-quality experience for the one precious summer internship for the MBAs. But they also “need” something useful from the interns. “For a company our size, we need the work these guys produce to have meaningful impact for the company,” DeGisi says.
The chance to innovate and impact organizations early on is what drew Chang to itBit. “I joined itBit to be on the ground floor of a company that is changing the way we move assets in an efficient and trustworthy way using blockchain technology,” he says. “This is a chance for me to be part of a fundamental shift in the way the financial world works, and that is very exciting.”