Articles by Kevin Travers

University of Delaware, Other Universities Going Long on Fintech

The University of Delaware recently received a $9 million tax incentive to construct a new Fintech Center on its premier Science, Technology, and Advanced Research (STAR) campus, with help from a community-building company Cinnaire. Slated for completion in 2021, the building marks yet another fintech-focused resource for higher education.

Financial technology programs have long been offered at prominent business schools such as Harvard, Stanford, and Columbia, international schools such as Oxford, and research institutions like MIT since the late 2000s. 

Now that fintech has become a long term value creator in the financial world, other institutions such as the University of Michigan, Fordham, and Delaware are excited to implement fintech opportunities on campus for undergraduate and graduate students alike.

Discover Bank and Cinnaire jointly funded the building, a $39 million project. According to Delaware plans, it will create a space on the Delaware STAR campus to host a new Financial Services Incubator to encourage research and collaboration between students and industry leaders.

“The FinTech building will bring together computer science, engineering and business experts in cybersecurity, human-machine learning, data analysis, and other emerging financial technologies,” said Levi Thompson, Dean of the College of Engineering. “These collaborations will allow us to provide our students with a very unique experience that prepares them to excel in the workforce. Furthermore, our Fintech discoveries will benefit people throughout Delaware and the world.”

Cinnaire is a national nonprofit that focuses on improving communities’ financial health by creating capital solutions to revitalization projects: lending funds, managing, and building housing structures. 

Funding communities is what Cinnaire does best: in this case, utilizing a New Markets Tax Credit to fund an addition to the Delaware campus.

The nearby University of Fordham at Lincoln Center has also been trending toward preparing students for a fintech world. Undergrad and graduate students pursuing an MBA through the Gabelli School have the option of a fintech concentration.

The course work not only incorporates data science and machine learning skills into the worlds of credit lending and risk management but facilitates relationships between students and a wealth of industry partners. 

Sudip Gupta, professor, and Director of the MS Quantitative Finance program, spoke about the courses’ popularity there. The program is ranked in the top 20 of its kind in the world by Risk Magazine.

He has seen a revolution in fintech in the past few years that has recently received a big push by pandemic forces, introducing the wholesale adoption of fintech techniques into traditional financial institutions.

“The fintech revolution in the industry- big data, machine learning techniques, storage capacity, and cloud computing has been going on for the last couple of years,” Gupta said. “The pandemic provided the big push to move toward that direction.”

Gupta has been following the development of alternative credit closely, recently publishing an award-winning paper studying machine learning to create alternative consumer credit scores using mobile phone and social media data.

“The idea of my research- let’s look at people who do not have a credit history or enough traditional credit you could get from a FICO score,” Gupta said. “Using this data, it turns out they are better predictors, and better to judge than FICO, and can reach out to more people.”

Gupta is excited for the adoption of big data techniques into alternative and traditional consumer loans because it offers a win-win for consumers and institutions alike, he said. Echoing the findings of many successful alternative finance companies, Gupta said his research showed that collected data could offer better insight for lending than “stale FICO scores.”

Up north at the Univerisity of Michigan, Professor Robert Dittmar at the Ross School of Business heads the Fintech Initiative. He is working on adding even more fintech classes. Recently, through a partnership with PEAK, a Chicago fintech lending company, Michigan launched a fintech initiative that incorporates undergrad and grad classes, faculty research, and a fintech entrepreneurial club that connects students to industry leaders. 

Michigan Ross is adding fintech classes for a variety of reasons.

“The simplest reason: students are interested in learning more about this kind of space,” Dittmar said. “And we’re seeing more demand from the industry side for students that know more.”

For years Dittmar said tech companies and startups in silicon valley were pioneering innovations in the industry. Through talking with alumni and contacts in the industry, Michigan found that fintech has gotten to the place where there is an excellent supply of data engineers. Still, there is a demand for professionals with the financial business expertise to implement these technologies.

“What we are trying to do at Ross is fill in that gap,” Dittmar said. “what we’d like is for [students] to know enough about the technology that they can provide the insights of finance and business to the people that are doing that technical work.”

At Ross, they are organizing what will one day be like a fellowship program. The program will feature a combined learning experience: students will learn data analytic finance, apply their computing skills in credit decision making classes, and then connect with the industry in experiential learning classes.

“In the last couple of years, I have been taking students to London to work at fintech startups in the UK,” Dittmar said. “And we are hoping to expand that program so that most or all graduate students have the opportunity to participate in something like that.”

Last year Ross hosted a “Fintech Challenge” competition to design a banking service to reach customers in a “banking desert” in rural Michigan. The program is hoping to host another challenge this year, despite complications of COVID-19.