The publication by the Strathclyde Business School's Centre for Financial Regulation and Innovation of a White paper on “Strategic Fintech” was motivated by the introduction of Fintech into the syllabus of business schools. Its contribution is in interpreting the taught element in Fintech course and how future innovators can make the most of disruptive digitial innovations. It defines Strategic Fintech “as a way of thinking, acting and influencing in financial services in order to promote the success of an organization and/or society”.
There are a multitude of different definitions of the term Fintech. It is commonly used to describe financial technology driven innovation. It refers more casually to a subset of digital financial business models that have technology at their core.
The author was responsible for the introduction of the first Msc in Fintech in the United Kingdom at Strathclyde Business School. It quickly became apparent that students had different expectations as to the meaning of Fintech and therefore what the taught element should contain. The white paper therefore proposes a framework from which a curriculum can be constructed, both reflecting changing requirements in financial skill sets and the need for business school graduates to be taught to manage disruptive change. This curriculum incorporates programming, analytics and regulatory elements.
The need for a Strategic Fintech approach lies in the rational for business schools, namely to train the business leaders and managers of the future. Their greatest challenge, in a rapidly changing digital world, is to prepare students for the disruption ahead. As Peter Drucker explained, this extends to social legitimacy, values and missions. This is typically addressed through a focus on case studies that presents students with managerial challenges. The paper therefor introduces the concept of Strategic Fintech through the lens of an implications led approach. This empowers students to evaluate the changes that financial technology brings to financial services and helps them understand the changing nature of financial mediation in a digital world.
The paper provides a framework from which to manage disruption at both a business and a societal level. It proposes the inclusion of disruptive business models, new financial service delivery methods, distributed ledgers, change management, regulatory challenges, and changing financial skill-sets into the syllabus. This addresses the aforementioned expectations gap. Students are given a framework, not a panacea to instant riches. It suggests that what is required of business school students is to be equipped with the insights needed to navigate the reshaping of financial markets. It also introduces concepts like innovation laboratories and financial data lakes, both of which tools to manage disruptive technological change.
The paper concludes “the concept of Strategic Fintech is a mindset which revolves around the process by which insights into the business and societal implications of the Fintech revolution are used to transform financial services”. It is a way of thinking and applied analysis, as promoted by business schools. It is not just the evolution of technology but also the creation of an ecosystem.
Daniel Broby, Director, Centre for Financial Regulation and Innovation, Strathclyde Business School, UK.