The Rise of FinTech
Can Taiwan Make Up for Lost Time?
FinTech – financial technology – has become a hot trend in finance, but Taiwanese business schools have been slow to recognize its growing importance. A few prominent institutions are trying to change that, hoping they’re not too late.
Can Taiwan Make Up for Lost Time?By Jennie Lee
From CommonWealth Magazine (vol. 590 )
“Students who get the training of a traditional MBA education are still very smart, but their skills are increasingly obsolete because the world is changing so fast.” That’s the assessment of J.T. Hsu, partner and managing director of the Boston Consulting Group, in discussing technology’s disruptive impact on the rules of the game in many sectors in the business world.
Sharing Hsu’s sentiment is Kuan Chung-ming, a former chief of Taiwan’s Cabinet-level National Development Council (NDC) and now a chair professor in National Taiwan University’s Department of Finance. As head of the NDC, he often came in touch with startups showcasing financial technology (FinTech), but after returning to academia, he discovered educational institutions were not that interested in “FinTech” and few were discussing it, not to mention doing research or offering courses on it.
“There were even College of Management professors asking me what FinTech was and how to spell it,” a concerned Kuan says, though some business schools have started to gain awareness of the phenomenon.
At the end of last year, posters and banners could be seen around the campus of National Kaohsiung First University of Science and Technology (NKFUST), put up by the school’s College of Finance and Banking to advertise a presentation for students on a new data-related course being offered.
The campaign was conceived to emphasize the importance of the school’s transformation in teaching “data,” a sign of how NKFUST has been the traditional Taiwanese business school quickest to respond to digital finance’s rise.
Known for its focus on practical training, NKFUST was selected by the Ministry of Education to promote Business 4.0 reforms, with its College of Finance and Banking responsible for “intelligent finance.”
Lin Chu-hsiung, dean of NKFUST’s College of Finance and Banking, said he only heard of the term “Big Data” for the first time in 2014 and realized after doing a little research that every sector was feeling its impact, especially the financial services sector. That made him determined to play catch up, with the first step the restructuring of his college’s curriculum.
Lin took inventory of the college’s courses, and he discovered that when his college’s Department of Accounting and Information Systems was founded, it designated “programming design” and “database management and applications” as required courses. He immediately decided that starting in the 2014-2015 school year, the other three College of Finance and Banking departments would offer similar courses to give freshmen basic programming language skills.
His next step was to create a “Finance and Banking Big Data Center.” Students found to have an interest in programming design and system development after taking the two required courses could be selected by the college to receive extracurricular training in the R and Python languages offered by the center.
The Big Data Center is being set up at the end of January, with about a dozen sophomores selected as seed students to be cultivated in the program. The government-run Taiwan Academy of Banking and Finance has also commissioned NKFUST to cultivate seed teachers for its programs.
IT Skills Now Essential to Financial Sector
NKFUST has more aggressively promoted the crossover from “finance” into “information technology” than any other school in Taiwan. One of Taiwan’s top science and engineering schools, National Chiao Tung University (NCTU), has also been busy strengthening training in the two disciplines.
The school’s Department of Information Management and Finance was the first university department in Taiwan to integrate the financial and technology fields. It was established in 2004 and then merged with the school’s Institute of Finance and Institute of Information Management in 2013.
When the department was first founded, late Polaris Group founder Wayne Pai (who died in 2008) noticed that foreign brokerages were generating healthy profits by relying on program trading with only a small staff. It made him realize the power of financial technology, and, because of the close long-term cooperative relationship between the Polaris Group and NCTU, led to the creation of the NCTU department.
The department’s goal is to nurture graduates who can write a complete information model. Department Chairman Chen An-pin says traditional business education can give students basic skills, but as big data and cloud computing become increasingly mature, the development of the financial services sector will be inevitably tied to information technology.
Consequently, even students with a liberal arts background must study programming language for three years. “The benefit of learning programming language is that whenever students have a creative idea, they can put it into practice themselves,” Chen says.
In working with the financial services sector, Chen discovered strong demand from businesses for people with a cross-disciplinary background. Financial firms such as Yuanta Financial Holding Co., E.Sun Financial Holding Co. and Fubon Financial Holding Co. have sought out Chen the past two years, providing funds to support research by teachers and giving students internship opportunities.
Chen contends that if students do not acquire information technology skills, they may have little chance to showcase and make use of their basic financial knowledge and talent.
An Educational Laboratory
Top institutions, from technology universities to engineering departments, have come to realize the impact of FinTech on business education. How has Taiwan’s premier higher education institution, National Taiwan University (NTU), adjusted to the phenomenon?
The dean of NTU’s College of Management, Andy Guo, believes that technology is just one facet of business education and began offering a course on the subject this year to test students’ reaction. If their response is enthusiastic, the school will design more courses in the field.
The new course, as described by Guo, is called “Big Data and Business Analysis.” It is the College of Management’s first course related to Big Data and is being taught by professors from the college’s Information Management and Business Administration departments and the private sector.
The professor from the private sector, Willie Yang, managing director of cloud services specialist eLand Information Co., revealed that he will have students work with huge amounts of credit card data, the first time he will use data related to financial practices in the class. The course will also introduce credit card data sets for analysis along with the advertising strategies of different credit card companies and their online word-of-mouth, ultimately integrating the specialized fields of information science, finance and marketing.
“In the past it was pretty hard to obtain megadata, but now the related technologies are all mature,” he says excitedly.
At the other end of the College of Management, the “activist” faction’s Kuan Chung-ming has begun sowing FinTech seeds in another way, hoping to use the “workshop” model to give students hands-on exposure to FinTech for the first time.
At the beginning of December 2015, Kuan also organized a forum titled “Accounting for Intangibles: Financial Technology in Taiwan” in the name of the Taiwan Econometric Society, which he founded in 2007. The weekend afternoon forum’s 250 seats were sold out.
“The effort to promote FinTech in local business schools cannot depend on just one or two teachers. So the first step is still to raise awareness and interest within academia,” Kuan stresses.
The Race to Catch-up
Kuan considers FinTech a “basic infrastructure” of the future. Many Taiwanese businesspeople operating in China have told him that they rarely need to use cash when taking a taxi or eating out, a sign of how pervasive FinTech has become there, Kuan says, a sign of how far Taiwan lags behind in the field.
“Taiwanese businesspeople used to find it hard to do things when they invested in certain countries because of the poor basic infrastructure in those places,” Kuan says, warning: “If Taiwan does not catch up on FinTech, it will simply be waiting to become a second-rate country.”
To avoid that fate, Taiwan must face up to technological change in the future, and the education system responsible for nurturing business talent must also change to deal with this new reality.
Translated from the Chinese by Luke Sabatier