One of the most intriguing phenomenons of this age of disruption is financial technology. Fintech, encompassing a range of industry innovations like peer-to-peer lending, newfangled ways of dishing out student loans, or online and mobile banking, affects long-standing banks, financial institutions, and economies alike. Between 2010 and 2015, investment in the industry boomed from less than $2 billion to nearly $20 billion. Now, finally, an elite business school has caught up and invested significant curriculum into training MBAs for the industry.
New York University’s Stern School of Business announced today (June 22) incoming full-time and part-time MBAs will be able to specialize in fintech. With a smorgasbord of eight elective courses ranging from such topics as mobile banking and the impact of digital currencies on the financial services industry, the specialization is one of more than 20 offered by NYU Stern.
“Technology continues to transform the business landscape at a breathtaking pace,” Vice Dean of MBA Programs and Online Learning Raghu Sundaram said in a release from the school, noting the specialization is the result of the Finance and Information, Operations, and Management Sciences (IOMS) departments joining forces. “Business education needs to innovate to keep pace with the rapid rate of change.”
A GROWING POINT OF INTEREST AMONG MBAs
While MBAs have founded fintech giants SoFi, Commonbond, and Earnest, few schools offer much curricular opportunity for MBAs interested in the space. According to David Yermack, Stern finance professor and academic co-chair of the specialization, that won’t last long. “I think the market will force every major business school to make a major investment in curriculum in this area,” Yermack tells Poets&Quants, noting MIT’s focus on extracurricular offerings in the space, including a student fintech club and a MOOC course on digital currencies offered by a Princeton professor. “I wouldn’t be surprised if other schools join the race and close the gap fairly quickly,” he adds. “They would be pretty silly not to.”
Indeed, students appear to be taking fintech matters into their own hands to catch up with the industry. Pennsylvania’s Wharton School launched the Wharton FinTech Club at the beginning of 2015. Last November, MIT’s Sloan School of Management announced the addition of FinTech Ventures — the first graduate-level course in the U.S. focused entirely on fintech. And now, Yermack says, NYU Stern becomes the first to dedicate a hefty portion of the curriculum to the rapidly burgeoning field.
“We need to be teaching what companies on the outside are hiring students to do,” Yermack believes. “And the pace of change in industry has been so quick that not only Stern, but business schools in general, have had a tough time keeping up with market demand and are still catering to positions in areas like sales and trading and derivatives that are not so important in the economy.”
The genesis of the specialization dates back to early 2014, when Yermack attended the Bitcoin Roundtable in New York City. Surrounded by entrepreneurs and other major players, Yermack noticed something. “They had huge issues with uncertainty about compliance and regulatory oversight of the industry,” he recalls. “And it just struck me there was an opportunity for us to educate professionals at the university who could fill the unmet need for people to work as executives, attorneys, and business strategists in these firms.”
So Yermack partnered with a NYU law professor to create a Stern-based course focusing on the regulations surrounding Bitcoin. It was offered in the fall of 2014. Amid significant student interest, Yermack took it a step further and partnered with Alexander Tuzhilin, a professor of information systems at Stern, to co-chair and create a fintech specialization. Unexpectedly for Yermack, the two were able to create the curriculum rapidly.
To be sure, it seems ideal they moved quickly. In 2015, Inc called fintech one of the most promising industries of the year after fintech companies of all sorts dotted their Inc 5000 list. Students, meanwhile, have been demanding better of B-schools.
“I’ve been hearing for the past year or so that Stern was not moving quickly enough to keep up with industry,” Yermack says. “I think we can see this indirectly in the enrollments of some of our legacy courses. There is an increasing mismatch in what business schools know what to do and what faculty specialize in, and what the demand is for jobs externally. And we have to find a way to address that.”