With fintech startups threatening the traditional banking industry, some financial institutions are refusing to play the role of helpless victim by launching their own innovation hubs. However, most of these idea labs aren't found in the U.S. Rather than resign themselves to fate and surrender market share as they are increasingly marginalized by fintech startups, many of the world's leading banks are taking the lead with a proactive strategy: launching their own internal innovation labs. These aren't just hollow corporate initiatives designed to generate some PR buzz. And they go beyond the typical R&D department you might find tucked away in some corner office. They are bona fide programs, with their own slick facilities backed by a real investment -- both money and manpower.
In banking and finance, the hottest MBA jobs are now in fintech. "I caught the bug coming into business school," says Dan Elitzer, an MIT Sloan MBA at IDEO Futures, a Silicon Valley innovation consultancy, which is helping craft fintech ventures. The founder of the MIT Bitcoin Club spent his summer interning at Circle, the bitcoin start-up led by a former JPMorgan Chase executive. Dan, who works with Citi Ventures and NASDAQ, may be a fintech star but he is not a rarity. The race to harness financial technologies has opened up a wealth of MBA career opportunities.
Banking has been around for thousands of years, at least since the days of the Roman Empire. It's an industry steeped in tradition, and the "right way" to do things is firmly set in stone. Or, it was – until the modern fintech (financial technology) industry started to disrupt banking significantly from 2008. Fintech companies are not steeped in tradition. Many of them are recent start-ups, created with the idea that new technologies can be used to do banking better.
You've heard it at conferences, in meetings and maybe even bandied about at dinner parties. Ever since a wave of financial technology startups emerged after the 2008 subprime mortgage crack-up, "fintech" has become shorthand for a digital revolution that could sweep away antiquated banking practices. But its definition has become so elastic that it's hard to know precisely what it is, let alone what it augurs for a global financial industry in dire need of innovation. It's a catch-all label applied to companies using the internet, mobile phones, cloud computing and open source software to make banking and investing more efficient. It's divided into two spheres: consumer-facing companies that offer digital tools to improve the way individuals borrow, manage money and finance startups, and back-office ventures that help financial institutions streamline their operations behind the scenes.