I felt like I was peering into the future of finance as a participant at Finovate 2014 held in San Jose. The conference is the biggest showcase of new financial services technology applications in the world. I also remember thinking, “Wow, this is a big deal,” when I learned that two other similar conferences, LendIt and Money2020, had more than tripled their attendance in the last two years.
While there is no formal definition of “FinTech,” we at Wharton FinTech define the term as “an economic industry composed of companies that use technology to make financial systems more efficient.” Early players in the late 2000s were startups creating technology-based services that complemented or supplanted services typically provided by incumbent financial institutions. Today, FinTech players can range from big technology firms like Apple and Facebook foraying into payment services, to banks investing in more technology for their retail distribution channels.
Although much of my financial technology (FinTech) encounters, education and connections come from these national conferences, activities at Wharton have also stirred my passion for the industry.
The FinTech Hype Comes to Wharton
Last year, I had to explain the phrase “FinTech” to for my classmates to be able to grasp the kind of internship I was recruiting for. This academic year, however, is different. Through the parallel efforts of Wharton FinTech and Penn Bitcoin Club, two student-run groups on campus, Wharton students have attended two FinTech treks (New York and San Francisco), 10 external speaker series and a few Penn Bitcoin gatherings. FinTech has graduated to buzzword now.
I asked Daniel McAuley and Steve Weiner, first-year MBA students and co-founders of Wharton FinTech, why this is the case. McAuley and Weiner told me:
“Technology, data and entrepreneurship are massively impacting finance and our generation wants to be a part of that. FinTech is the natural avenue for students to apply their prior experience to a high growth technology vertical and Wharton, with its unparalleled finance pedigree and focus on technology on both coasts, is the place to do it. We’re also seeing a lot of interest from people who have non-finance backgrounds but recognize that FinTech is an exciting industry and a great way to narrow the search for a startup that is doing something they care about that has the potential to change the world.”
On the startup front, a handful of classmates have founded FinTech companies. Abaris Financial is an online marketplace for retirement annuities started by Adam Columbo W14 ENG14 and second-year MBAs Matt Carey C07, Nimish Shukla and Jason Grimes. Tesorio, co-founded by Carlos Vega C03 WG14 and engineering undergrad Fabio Fleitas, enables speedy and low-cost payments between companies and their vendors; and Fig Loans, launched by second-year MBAs John Li ENG07 W07 and Jeff Zhou, makes payday loans at lower rates than traditional lenders.
Wharton Student Stories
Accenture’s 2014 Partnership Fund for New York City report points out that FinTech investments have tripled to nearly $3 billion from 2008 to 2013. As the industry booms, recruiting activity and interest among students will intensify. Some students are already pursuing or considering careers with FinTech firms in personal wealth management (Wealthfront), payments (Stripe or PayPal), or alternative lending (CommonBond, SoFi), as well as many others.
For Chandni Chopra, a second-year MBA candidate, her interest is about being “part of the movement to financially empower people of all socioeconomic classes around the world.” She’s looking for FinTech opportunities in the Bay Area.
First-year Carissa Feria, vice president of finance for Wharton FinTech, is spending her summer internship in Manila. She chose FinTech because she believes it is the best way to use her seven years of experience in finance to create an impact in the Philippines, her home country.
And while other students might not identify themselves as FinTech enthusiasts. FinTech for them is still a “chance” outcome.
Graduating MBA student Kobina Ansah was set on being an entrepreneur at the start at Wharton. He co-founded LIVEalpha, an online lending platform. While he has always liked things that could be solved formulaically, he also believes that a finance product was something potential investors could easily understand and get excited about.
For Carey at Abaris Financial, becoming part of the FinTech swell wasn’t a deliberate decision. Before business school, Carey worked in a team at the U.S. Treasury Department creating a new policy to tie student loan interest rates to Treasury rates. From there, he wanted to solve a bigger problem in financial services: retirement spending.
My own mission coming into business school was to discover a role and an industry in which I could invest myself for the next 30 years in order to make an impact, big or small. Attracted to the dynamism of technology, I initially struggled to make that transition from a finance background. FinTech seemed like a strategic vertical to consider as it blended my existing skills in finance with a new passion for technology.
FinTech at Wharton is a story about students responding to activity in an exciting industry. But it is also a testament to how students at Wharton can explore and position themselves in a new field, pairing prior experiences and newly developed skills and connections.