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Future finance and the Cambridge MBA advantage

As trends like passive finance, block chain and mobile banking ramp up their disruption of the global finance industry, how is the Cambridge MBA preparing candidates for the brave new future of finance?

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Life is getting ever faster and more connected, so why should we expect our financial life to be any different? We want increasingly fast, secure banking, investment advice and other financial services.

For Dr Pedro Saffi, who leads the Finance Concentration on the Cambridge MBA, there are several key trends to keep track of if you are preparing to enter, or return to, the world of finance as a newly-qualified MBA.

“Fintech is already a major source of job and entrepreneurial opportunities and this is only set to grow. Trends like passive asset management, peer-to-peer lending, the blockchain revolution and opportunities emerging from developing countries all throw up a huge array of possibilities for an MBA interested in this field.

“The traditional model of active investment where customers pay big fees for fund managers to try to beat the markets is changing rapidly as passive investing takes over, offering much smaller fees across all asset classes. This requires a completely different mind and skill set for future fund managers, so MBAs need to be aware of this and prepare for this new world of asset management, as active managers face increasing demands from clients to deliver performance.

“Similarly, blockchain technology (which encompass technologies that can speed up financial transactions) is offering an incredibly fertile space for entrepreneurial start-ups. Much of what banks offer today will be disrupted by blockchain in the near future, so it’s a great space for the savvy MBA to explore opportunities to offer something new and niche to the market.”

And it’s not only in the developed countries where the opportunities lie. Developing countries are also a burgeoning finance market of the future offering potential for interesting, and satisfying, roles in catering to the ‘under-banked’ segments of the human population.

“There may be small businesses and retail clients who have no access to bank accounts but who have a mobile phone. They are just as keen to manage their personal and/or business finances fast and efficiently as the most sophisticated investor. These emerging markets are again fertile territory for the entrepreneur who wants to be involved in finance while offering a service or product that can also help people.”

The Cambridge MBA’s Finance Concentration focusses very much on the future, preparing MBA candidates to understand the latest trends in finance and discover opportunities within it. Along with in-depth examination of the emerging trends, led by Pedro and Robert Wardrop, Executive Director of the Cambridge Centre for Alternative Finance, the Concentration offers unique access to leading figures from the finance world just an hour away in London. Talks, discussions, receptions and networking opportunities are all part of the experience.

For Gonçalo de Vasconcelos, co-founder and CEO of online equity investing platform SyndicateRoom, AltFi’s Alternative Platform of the Year in both 2016 and 2015, the opportunity to network with the finest fintech minds around is something the Cambridge MBA candidate, who wants to break into the field, should grasp with both hands.

“My number one piece of advice would be to network during your MBA year. It’s still a small world in fintech, so if you attend every networking event you can in both London and Cambridge, you will have met everyone who matters by the end of your MBA.”

Gonçalo first spotted his opportunity while undertaking his Cambridge MBA in 2011, before the fintech disruption really got underway.

“There was no such thing as the market as it is now, with all its possibilities. Investing online was unheard of and we were told by the industry that it wouldn’t work – no-one would ever invest online. But this was where the fact that none of us came from the banking sector paid off – we saw things differently and we could see this was the future. So my second piece of advice would be – don’t think you have to have experience in banking. There are myriad opportunities out there. When we hire we look for people who are clever, proactive and hungry for success – a banking background isn’t as important as you may think. The same applies for entrepreneurs with a new idea to bring to the sector – don’t be put off by your lack of traditional experience – or by the nay-sayers!”

The opportunities are not solely in the fintech space, says Louise Westerlind, a 2008 Cambridge MBA from a financial services background (including asset management consulting and microfinance research) and whose forays into the world of finance entrepreneurship include co-founding rewards-based crowdfunding platform Fongogo and preparing to set-up a peer-to-peer lending platform. Louise is keen to alert MBAs to the opportunities coming out of the space where fintech and traditional banking are merging, and in which tech giants are participating:

“Fintech is now a broad field and some banks are buying fintech startups and engaging in coopetition (cooperation between competing companies) with TransferWise, Trustly and other fintech payment companies. Its no longer a David and Goliath race between banks and fintech companies, but includes tech giants like Amazon and PayPal who are leveraging their data to invade the banks’ space. Facebook is also moving into the space (having now received an e-money license in Ireland) and could eventually be offering peer-to-peer payments through Facebook Messenger.”

Louise also has some advice for MBAs who are not thinking of the banking sector as a future career:

“They really ought to follow what’s happening in fintech and its coopetition with the banks closely. If you aspire to a C-Suite position outside of the finance industry, you will be much better equipped to lead your company if you understand what’s happening in fintech. An understanding of it could bring massive savings to your company when making financial services related decisions. There will be a period when you could be paying too much for too little unless you understand what the fintech space is offering. You will be very valuable to your company if you can understand and evaluate the options.”

Whether you find your future career in traditional finance or fintech, finance will always be about people and how they can be helped to make best use of their money to improve their lives. Whatever your role, it’s a great field to be in.