Part 1: The vision, mission, and strategy for Michigan FinTech (MFT)
This post is part one of a two-post series outlining the vision, mission and strategy for Michigan FinTech (MFT). The second part is posted here.
This past April, we officially registered the first student-led FinTech initiative at the University of Michigan: Michigan FinTech.
This summer, I have been working on communicating what this new organization is all about. Whether pitching to potential sponsors, alumni, faculty, students or friends, I knew we needed to have a solid understanding of our initiative.
As our team and organization is launched this Fall and our presence on campus grows, we need to ensure that we focus on what is important. So, I decided to put together an outline for Michigan FinTech. In other words, the “why, what and how”.
I couldn’t be more excited to share with you our plans for this year and the future of FinTech at the University of Michigan. We’ve broken this post into two parts:
- Part 1: Why are we doing what we are doing and why you should care?
- Part 2: What are we planning to do and how will we achieve our goals?
The “Why”
1. Why FinTech?
We are in the early stages of one of the largest sector-driven opportunities of our lifetime, the secular re-imagination of financial services (FinTech Collective).
Emerging technologies are transforming financial services on a global scale. Technological innovations such as Blockchain, cryptocurrencies, cloud technologies, big data analytics, artificial intelligence and machine learning are disrupting the financial services sector and enabling new business models. FinTech is empowering consumers and enterprises with products that are superiorly designed, remarkably efficient, and wonderfully personalized.
FinTech (“Financial Technology”) is touching every aspect of the financial services space:
- Personal Finance Management & Mobile Banking
- Lending
- Digital Payments
- Asset Management (Robo Advisors)
- Cryptocurrencies & Blockchain
- Insurance
- & More
This market map should do a good job at demonstrating just how far-reaching FinTech truly is.
Let’s take a look at the FinTech space by the numbers, courtesy CB Insights. You can access slides here and here.
- VC money is flowing into FinTech startups, raking in $34.4B over 3000+ deals since 2011.
- As if thats not enough, there are currently over 20 FinTech unicorns (startups with over $1B valuations), with 5 FinTech unicorns in the most recent quarter alone.
- Additionally, there is large growth in major bank investments to VC-backed FinTech companies, with corporate participation in 1 of every 4 FinTech deals.
2. Why Michigan?
Clearly, FinTech is a hot space, and peer clubs at other schools are striving to take a leadership role in the space. One of the big challenges we noticed was that there was quite a gap of student awareness of FinTech at our University. That needed to change.
FinTech, by nature, is a multidisciplinary field — the combination/intersection of Finance + Technology. The question then becomes, why NOT Michigan?
Our University has the potential to become a leader in the FinTech space due to our strengths, with nationally ranked programs in:
- Business & Economics
- Computer Science & Engineering
- Math & Statistics
- Information Science & Data Science
3. Why You?
A valid question is, “Why should I care?” We can tell you this much: we are at a very exciting, unique point in time where we have the opportunity to be a part of, and even shape, an industry going through massive transformation and innovation. FinTech offers the chance to create the future of financial products and systems.
And the fact that FinTech is so multidisciplinary makes it an even stronger case for Michigan students. Financial technology is tech and data-driven; FinTechs are recruiting top engineers, data scientists, statisticians, programmers, and business-minded individuals to reshape financial services. The piece of the pie is large, and the opportunity is ripe. We believe it’s better to be shapers rather than distant spectators.
To be clear, there are two sides of the FinTech coin. On the one side, we have tech-savy startups who are leading the disruption and innovation in the space and taking on powerful incumbents. On the other hand, you have the banks/established players who have invested billions into FinTech innovation and are refusing to fall behind.
For those drawn to the entrepreneurial, fast-paced environment of a start-up—the size of the pie to disrupt is massive. Still, not everyone will want to go to a startup. For those looking for more of a traditional route, banks are hiring individuals who bring new thinking to banking and hiring them on roles within, say, their digital banking or innovation groups. For example, consulting firms (i.e. McKinsey, PwC) are offering specialized consulting services for FinTechs; banks are acquiring/partnering with startups or starting FinTech companies of their own.
Many of us will decide whether we are looking to join traditional companies or take a calculated risk and join an early-ish stage, high-growth and high-impact startup. The FinTech trend is increasingly apparent among MBA/graduates; students seem to be increasingly less interested in traditional routes and more drawn to innovation.
It’s time FinTech is brought into the mainstream at Michigan; we believe Michigan students want in.
Read Part 2 here to learn about what our goals are and how we plan on achieving them.
