The financial services industry has been flipped on its head in the past few years by the emergence of new technologies such as cryptocurrencies, automated business lending, crowdfunding and robo-investing.
Most of this new technology is being driven by artificial intelligence, which uses computer systems to perform tasks that normally require humans, including data analysis, decision-making and speech. There's also machine learning, which gives computers the ability to learn and improve from experience without needing to be reprogrammed. If this all sounds eerily close to Ridley Scott's Blade Runner 2049 or Stanley Kubrick's 2001: A Space Odyssey, that's because it is.
This new way of thinking has forced countless bankers and financial advisors to re-examine their game plan and embrace financial technology, also known as fintech, to remain competitive. But is the same happening at this country's business schools?
"We are focused on disrupting the traditional model of education and classroom teaching," says Michael King, associate professor of finance at Ivey Business School in London, Ont. "Rather than scheduling courses and holding exams, we are bringing fintech into all aspects of the student experience."
This is primarily being achieved through Ivey's digital banking lab, created with the help of a $3-million grant from Bank of Nova Scotia in 2016. The point of this lab is to give students a platform for engaging with fintech through organized activities such as hackathons, case competitions and guest speakers. Students also interview fintech startups, write articles for the Ivey Business Review and teach each other how to code.
"These are the tools that millennials are using to gather information and to learn about new technologies at a much faster pace than through a traditional course," says Dr. King, who is also co-director of the digital banking lab.
Separately, Ivey offers a two-day fintech primer for business executives who want a road map for navigating a world where crowdfunding campaigns are financing startups and human investment advisors are being replaced by algorithms. A similar fintech boot camp is available from Smith School of Business at Queen's University in Kingston.
Both programs explain the technological transformation of financial services, and how executives can most effectively harness innovation within their own organizations.
Queen's and Simon Fraser University's Beedie School of Business in Burnaby, B.C., have gone a step further by introducing fintech into their curriculum. Queen's has created a fintech elective for master of finance candidates that explores some of the ethical ramifications of fintech.
"For the most part, financial technology will level the playing field, lowering costs and increasing access to financial services," says Ryan Riordan, professor of finance at Smith. "We want to make sure at the margins that people are not being excluded or exploited."
He points out that artificial intelligence and machine learning can, for example, accurately determine the likelihood of someone repaying a loan. But at the same time it can create a system that blindly discriminates against certain people.
SFU's undergraduate course, introduced this year, in part examines fintech's impact on business-to-business and business-to-consumer commerce. But it also uses simulation tools that help students understand the dynamics of physical and financial supply chains connecting business partners. "It's a very practical course," says instructor David Gustin, a visiting lecturer and founder of the consultancy Global Business Intelligence.
Canadian business schools have begun to embrace fintech, but in most cases it's happening slower than south of the border. In the United States, spurred on by student demand, Stanford and Georgetown universities began offering fintech courses for MBA students this fall. They join a number other U.S. institutions, including Columbia, University of Pennsylvania's Wharton School, and the Massachusetts Institute of Technology (MIT), which all launched similar programs in recent years.
It's not easy drafting a new syllabus for a subject that has few textbooks or professors who can teach it. "We incorporate fintech cases and material into our courses and curriculum, but we do it in a cross-disciplinary fashion," says Dr. King of Ivey, part of the University of Western Ontario.
Ivey plans to add a fintech elective next year. "It will be the icing on the cake of our current offerings," he says.
Since fintech is the intersection of financial services and technology, some skills such as engineering, artificial intelligence and programming languages are outside the purview of a traditional business school. But that may change.
"There is a shortage of potential hires who understand the fintech space," says Dr. Riordan. "Organizations are either hiring those with a finance background or a computer science background. Ideally they want employees who understand both."
Oscar Jofre, co-chair of the Equity Crowdfunding Alliance of Canada, says he would like to see more business graduates who can effectively articulate the opportunities created by fintech to stakeholders and potential investors.
However, he points out, there's no substitute for grey hair even in the fintech space.
"In Europe and Asia, most fintech startups have two or three ex-bankers on their team," says Mr. Jofre, who is also chief executive officer of Toronto's KoreConX, a service that simplifies the process of raising capital online. "The knowledge base they carry is invaluable."