Adding Fintech to the Business Curriculum

• Fintech innovation has been sparked by capital investments, customer demand, new technology, regulatory changes, and enhanced access to data.
• As schools add fintech majors, they should not only create new courses and offer hands-on learning opportunities, but also focus on ethics and collaborate with partners inside and outside the university.
• At the University of Delaware, fintech is explored through multidisciplinary initiatives, long-standing financial programs, and new curricular offerings.

 
The field of finance is in the middle of a technological revolution. In fact, fintech—shorthand for the interdisciplinary field dealing with the relationship of finance and technology—is becoming one of the fastest-growing industry sectors globally. As of July 2023, according to a report from McKinsey, publicly traded fintechs represented a market capitalization of 550 billion USD, and there were more than 272 fintech unicorns with a combined valuation of 936 billion USD.

Among all business disciplines, the field of finance offers the greatest potential synergy with technological innovation, in part because financial industries are so data-rich. Plus, financial services account for 12.8 percent of the S&P 500 index—among the largest components of the U.S. economy. As a result, the marriage of finance and technology is natural, making fintech a useful field of study for business schools.

However, for many business schools, the fintech revolution is just beginning. While a number of schools currently run master’s programs in financial technology, few offer either undergraduate majors or PhD programs on the topic.

At the Alfred Lerner College of Business and Economics at the University of Delaware (UD), we consider fintech a critical subject. This is in part because of our location in Newark, Delaware. Not only is our state situated near some of the nation’s major financial hubs, it is also the place where many of the world’s top companies are incorporated. This means that Delaware’s court system is pivotal in refereeing how the nation does business—and that the Lerner College has both an opportunity and an obligation to study the current state of finance.

As dean of the Lerner College, I have overseen existing and new initiatives built around fintech. This has given me fresh insights into how generative AI and other technological innovations should be introduced into the business school curriculum.

A Bit of Background

Fintech is a natural byproduct of our current era of technological innovation, often referred to as the Fourth Industrial Revolution. The effects of this revolution are comparable to the introduction of steam engines in the 1800s, electricity in the 1930s, electronic computers in the 1940s, and the internet in the 1990s. I believe that the dramatic changes arising from today’s innovations will, in the aggregate, enrich both our personal and professional lives.

A key driver of current innovation is the technological advancement in data science, including the storage, processing, and analysis of data. Other major factors are machine learning and artificial intelligence.

The effects of the fintech revolution are comparable to the introduction of steam engines in the 1800s, electricity in the 1930s, electronic computers in the 1940s, and the internet in the 1990s.

Enhanced access to data has been an essential component of fintech innovation, but additional factors have contributed to the rapid growth in this sector:

• Investments from venture capital firms and financial institutions.
• Customer demand for more convenient and innovative financial services, which has led to options such as digital payments, mobile banking, and cryptocurrencies.
• The rise of neobanks, robo-advisors, and insurtech companies.
• Encrypted and incorruptible smart contracts, which have contributed to advancements in supply chain management.
• Open banking initiatives, regulatory changes, and a focus on financial inclusion.

While many fintech startups draw attention, the revolution is also spreading in blue chip corporations. In fact, companies such as Apple, Google, Visa, PayPal, JPMorgan Chase, and Citi have all been fintech pioneers—and many consumers are using these companies’ products and services without even noticing.

For example, in the U.S., roughly three in four iPhone users have activated Apple Pay, and 55.8 million of them used Apple Pay to make in-store payments in April 2023. As of 2022, 78 percent of adults in the U.S. preferred to bank via a mobile app or website, whereas only 29 percent of Americans preferred to bank in person.

Time for a Fintech Major

As these new technologies become more pervasive, I have been considering how they should be addressed in the business school curriculum. It is a question I have been pondering for about a decade.

Back in the 2010s, when fintech was in its nascent stage, I had concluded that it was a niche field more suitable for a minor than a major or a degree program. It takes decades for business disciplines to be maturely developed and widely accepted. For example, while early finance activities can be traced to prehistoric times, finance did not become an independent business discipline until the mid-20th century, when the global financial system was formed. The management information systems (MIS) discipline was not established until the 1960s, almost 20 years after the first electronic computers were invented.

A fintech major should not simply be a double major in finance and MIS. It should be an integrated program that provides students with in-depth knowledge, diverse skill sets, and experiential learning opportunities.

Now, with the recent rapid developments in fintech, I consider it time for business schools to add graduate and undergraduate programming in this field. However, I don’t believe that a fintech major should simply be a double major in finance and MIS. Instead, it should be a truly integrated program that provides students with in-depth knowledge, diverse skill sets, and experiential learning opportunities. At best, it will incorporate these elements:

New courses. Because fintech requires specialized knowledge and skills, schools should develop courses focused on topics such as blockchain technology, cryptocurrency, robo-advisors, digital payments, peer-to-peer finance, crowdfunding, algorithm trading, AI, and machine learning.

Hands-on opportunities. Fintech is a hotbed for innovation and entrepreneurship. Business schools should inspire and nurture the entrepreneurial spirit among students by providing them with the skills to create and manage fintech startups.

Collaboration within the university. Schools should take advantage of cross-college expertise to develop programs in partnership with economics, computer science, engineering, and law departments. This approach can provide students with a comprehensive understanding of the technical, regulatory, and business aspects of fintech.

Collaboration outside the university. Schools should bring in professionals with diverse skill sets in fields such as finance, technology, law, and marketing. They also should foster relationships with fintech companies, startups, and industry experts. These external partners could deliver guest lectures, offer internship opportunities, and provide students with research projects that expose them to the real-world applications and challenges of fintech.

Ethical and legal training. Because compliance is a critical aspect of the financial industry, programs should help students develop a deep understanding of regulatory frameworks related to fintech. Courses also should integrate discussions about ethics and responsible business practices to address potential ethical dilemmas associated with emerging technologies, data privacy, and financial inclusion.

Lerner’s Approach

At the University of Delaware, finance is one of the largest majors, and we view the school as a critical partner in the region’s growth. We provide the community with opportunities for economic development, offer resources to startup companies, and use our research to influence policy. We also have committed to collaborating on technological innovation with industry, researchers, and the community. This includes promoting innovation in fintech in two primary ways:

Multidisciplinary efforts. We recently opened the FinTech Innovation Hub in collaboration with the Delaware Technology Park, a nonprofit research park that focuses on fields such as the life sciences, information technology, and renewable energy. Within the hub, faculty from Lerner will work on projects with colleagues from UD’s College of Engineering and representatives from outside companies.

In addition, our faculty in MIS, finance, economics, and operations management are collaborating on research in areas such as credit risk modeling, data security, and financial economic modeling that is shaped by data science methods.

Even though our students are digital natives, few of them have wrestled with the deeper questions of why these technologies should be used in the first place and how they should be applied in an ethical manner.

Curricular offerings. More than ten years ago, the Lerner College introduced a doctoral program in financial services analytics (FSAN)—a program we view as a precursor to today’s fintech specializations. This 54-credit program was developed out of a partnership with UD’s College of Engineering and with significant support from JPMorgan Chase.

In the FSAN program, students receive hands-on training in using tools and software that improve the efficiency of business operations; conduct research on data science theory; and complete internships with financial companies such as JPMorgan Chase, Barclays, Sallie Mae, and Amazon. Additionally, students must meet a publication requirement. So far, they have published in more than 50 journals and refereed publications that focus on topics such as predictive analytics, systemic risk in banking, and malware detection and classification.

Currently, we are exploring the development of for-credit and degree-granting programs focused on fintech. Because our undergraduate and graduate students are digital natives, many of them are already fluent in these new technologies—or think they are. In reality, few of them have wrestled with the deeper questions of why these technologies should be used in the first place and how they should be applied in an ethical manner.

The Proper Place for Fintech Education

Employers are seeking employees who possess foundational knowledge in both finance and technology. When business schools offer specialized majors in fintech, they provide graduates with skills that enhance their employability by meeting the demands of the evolving job market.

We owe it to our students to prepare them adequately for the huge changes that will keep coming in this field. And we owe it to our institutions to make sure our programs not only remain relevant to business, but also stay poised on the cutting edge of these changes.