Many financial services executives will be grappling with the challenge of how to harness technologies that are transforming the finance industry — financial technology (fintech) innovations like artificial intelligence (AI), its subfield machine learning, and blockchain, a distributed ledger technology.
Incumbent firms are now rethinking their offerings and digital capabilities, as they look to fend off startups that are competing for market share. Think about how Alibaba’s subsidiary Ant Group has already become a financial titan in China, or how digital-only banks like Monzo have taken on traditional lenders.
At the same time, the incumbents have sought to incorporate technology into their services, to offer sustainable value to their customers.
In response to the shifting competitive landscape, a number of business schools are offering executive education programs that explore the best practices for managing these challenges, whether you’re driving or safeguarding against the disruption.
Can fintech be a force for good?
The Fintech Innovation: Disrupting the Financial Landscape program offered at Cambridge Judge Business School is designed both to present a basic overview of fintech and the influence of technology in financial services, and to ensure that participants understand both the benefits and risks associated with the trading of data.
“The program will show how fintech can be a force for good in using data to gain insights that benefit consumers and financial service providers, but also remind participants that there can be a dark side including the misuse of data during this time of disruption — in which regulators often scramble to keep up with the latest rules and innovations,” says Raghavendra Rau, Sir Evelyn de Rothschild Professor of Finance at Cambridge Judge, who coordinates the program.
He says the term “fintech” technically stands for financial technology, and this can encompass everything from challenger services to some of the software used by banks and other financial services firms – but usually “fintech” is used to refer to new types of services.
The term is strongly associated with disruption, too. “In financial services, banks and other incumbent firms face startups that offer payment processing, wealth management, and personal and business loans,” Rau says. “The challenge for these incumbents is that they have far higher fixed costs than challengers, including office space and personnel, so the new fintechs often can undercut on price.”
He also spotlights a new trend: big tech companies have so much data that they are moving into financial services. For example, Amazon now makes loans to firms that sell through the ecommerce company’s marketplace.
Because the program will present a broad overview of fintech and related subjects, it will be very useful to many groups of people – including industry executives, entrepreneurs, and investors who need to understand all aspects of this changing landscape.
Harnessing disruptive technologies
There are many options for executive education participants who are looking to harness disruptive technologies to strengthen their market position. NYU Stern School of Business runs the FinTech for Executives: Understanding and Managing Innovation in Financial Technology program. Harvard Business School offers the Leveraging Fintech Innovation to Grow and Compete course. And Wharton puts on the Fintech Revolution: Transformative Financial Services and Strategies program.
Another option is the University of Oxford’s Saïd Business School, which offers the Oxford Fintech Programme, which explores key themes including the digitization of money, algorithmic technologies, and central bank digital currencies.
The program helps entrepreneurial participants gain a core understanding of the fundamentals of fintech, and real-world applications to help build a strategy for a new fintech venture – in addition to tackling new regulations. Oxford Saïd and the wider university have helped to develop globally successful fintech companies including Funding Circle, Onfido, Seedrs and Zoona.
Pinar Ozcan, Professor of Entrepreneurship and the Innovation Director at the Oxford Future of Finance and Technology Initiative, stresses the societal benefits of new financial technologies. She cites the example of bringing financial services to unbanked populations in the developing world.
“Think about chatbots, conversing with individuals in their local dialect to help them understand some basic financial concepts and budget their month, there’s a huge social impact that fintech can make using technology,” says Ozcan. “So part of what the course tries to do is give such innovative examples to bring home how tech can be for the betterment of finance and human kind.”
One thing that is unique about the course at Oxford is its ties to the Future of Finance and Technology Initiative, a research collaboration between Saïd Business School and industry. This means participants are gaining up-to-date knowledge in a fast-moving sector. “We bring the results of these research studies to the classroom before they are even published in the press,” Ozcan says.
In addition, the program draws on its rich network of alumni working in the fintech space for guest lecturing and mentorship opportunities. “The idea is that this program really provides a starting point on a wider journey into the fintech space,” she adds.