Fintech and Business School: What It Is and Why It Matters
Companies expect graduates to be able to apply relevant knowledge and skills immediately; in response, business schools should require new technologies to be taught in their curriculum.
You don’t have to look further than your own hand, since you are likely reading this on a smartphone or other mobile device, to see the massive impact that technology-based businesses have had on our society in recent decades. By businesses, I don’t mean just commercial or large-scale public companies; I also include small operations and nonprofit organizations where profit motive or shareholder return are not necessarily the primary focus. These organizations may be driven to fill a need, remove a friction, or bring other efficiencies to the marketplace.
These firms have literally affected every aspect of our lives, including the way we work, sleep, learn, and play. The rate of technology growth is faster than it has ever been in our history. These technology organizations are the greatest accelerators in societal change that we have yet witnessed—for good or bad. The nature of these firms is to push forward constantly and apply new ideas and new solutions—technological or otherwise—to the perceived opportunities, challenges, and inefficiencies they discover along the way.
On the other hand, the regulators and policymakers cannot keep up with the onslaught of new, technology-enabled services and features. These rapid developments are occurring in many fields, such as finance, medicine, manufacturing, and social media. However, as is typically the case, the policymakers tend to be one step behind newly evolving technology and practices. Technology is both applied science and applied engineering, whereas policy is thoughtful creation and application of rules based on experiences and expertise. Policy will always play catch-up, especially when policymakers are concerned with, and must consider, the potential unintended consequences of their actions. Businesses rarely look at unintended consequences in advance because their perceived mission is either to fill a current demand or get ahead of the next curve or trend.
This age-old conundrum contributes to the cyclical nature of new business models and their overall impact on society. How do we create an environment that not only encourages innovation and technological advancement but also protects the people intended to benefit from these new products and services from unintended consequences?
Let’s look at ride-sharing as an example, services like Uber. The model was quite simple in the beginning—creating a ride service to match people who need to get from point A to point B. In the first iteration, Uber viewed itself as a taxi service only. Today, the understanding of this landscape is vastly different, and the convenient, app-based payment methods helped launch its success. Ride-sharing services have changed the way many people view transportation and access. Previously, not having your own vehicle, or not having the ability to drive yourself, meant loss of independence.
Today that is no longer the case; whether you are age 16 or 86, ride-sharing services provide you with the ability to live your life without driving or owning a car, now considered by some to be the ultimate freedom. Many of us have met adolescents who are less interested in getting their license, buying and insuring a car, or paying for maintenance. At the other end of the spectrum, we look at senior citizens who may no longer possess adequate driving skills but, thanks to the advent of ride services, do not have to rely on friends and family to get around, allowing them to live more fully and independently.
Another aspect of this issue is equally revolutionary. Now, thousands of vehicle owners, equipped with nothing more than a smartphone and an app, can provide rides to thousands of other people who do not have access to a vehicle. All these customers need to participate themselves is a smartphone and an app (and money to pay), and boom! We have a revolutionary marketplace so simple we wonder why it has not been done before.
And of course, nothing bad happened ... right? There were no unintended consequences of this new technology-based service. But of course, there were. All new products, services, and programs have hiccups and bumps in the road. That is a normal and natural part of the process of introducing something new in the marketplace. However, what we have seen with Uber is far more than that.
Like most new offerings today, the company was in such a hurry to roll out their service that all the early product testing fell on the shoulders of the users and the drivers, showcasing unanticipated problems in real time. In retrospect, it should have been evident from the beginning that putting thousands of private drivers and private vehicles in a relationship with thousands of individuals would have consequences and would require processes to protect everyone’s safety and privacy.
What part of this relevant to blockchain, business schools, and AACSB? All of it. Blockchain is the newest technology to excite and captivate millions of people across every discipline. It has been touted as the greatest new technology since the internet, while simultaneously decried as a facilitator for drug dealers and other criminal enterprises.
Blockchain comes with its own unique origin story shrouded in mystery—think Satoshi Nakamoto and bitcoin. In just a few short years, blockchain, or Distributed Ledger Technology (DLT), in its many forms, has been a curiosity, a speculator’s bubble, a Wall Street darling, and an actual technology adopted by global organizations—large and small.
DLT is here to stay and will be a major technology component across dozens of fields, sectors, and organizations—there is no need to debate its potential application any longer. The more important question is how will organizations deploy DLT? Furthermore, what are the unforeseen or unintended consequences of the adoption of DLT? Policymakers and regulators are attempting to protect the marketplace from harm without strangling this new innovative technology. At the same time, companies are racing to deploy this latest dazzling technology.
Because the application of DLT is still relatively new, most organizations do not have a deep institutional well of relevant expertise and experience. Therefore, companies will need to tap outside resources to evaluate the potential benefits and drawbacks of DLT. What the marketplace needs is an infusion of technologically savvy personnel with the ability for critical thinking outside the bits and bytes. Undergraduate and graduate business school programs will provide the marketplace with the individuals best suited for careers in this field. These people do not have to know how to code, but they do need to understand how and what this technology can do. At the same time, they need to be well versed in the flows of business and operations with an understanding of the intersection of product and service with society.
Business school is the best place to learn these skills. Companies and nonprofits expect colleges and universities to be training our students to meet the challenges of today, and they expect graduates to be able to apply relevant knowledge and skills immediately. Business schools should be incorporating technology into their programs as a requirement—not to turn students into software engineers, but to educate them properly to help their future employers integrate technology and service delivery.
This effort needs to be real and substantive, not just a checklist of talking points in a brochure or on a website. In this era of noise and clutter, separating fact from fiction can be challenging. Objective third-party verification is more critical than ever, and AACSB stands in a unique position to ensure that our business schools are delivering not only what the market thinks they want, but also what the market truly needs.
John Jacobs is a distinguished policy fellow and executive director of the Center for Financial Markets and Policy at Georgetown University’s McDonough School of Business in Washington, D.C. He is a former Nasdaq executive and creator of QQQ, a widely held and traded exchange-traded fund (ETF) that tracks tech companies.