Professor Kathleen DeRose began her career as an investment analyst at Chase Manhattan Bank (now JP Morgan). Before joining NYU Stern, she was Global Head of Investment Process and subsequently Head of Strategy and Solutions at Credit Suisse, Founding Partner and Head of Portfolio Management and Research at a New York hedge fund, Managing Director and Head of Large Capitalization Portfolio Management at Bessemer Trust and Managing Director and Portfolio Manager at Deutsche Bank (successor to Zurich Insurance and Scudder Stevens and Clark).
Professor DeRose now serves as a non-executive director on the boards of the London Stock Exchange Group, Voya Financial, and Evolute and is the Director of the FinTech Initiative at the NYU Stern Fubon Center for Technology, Business, and Innovation.
Her upcoming Online Executive Certificate course, Foundations of Fintech, answers questions about new technologies, latest disruptions to the financial services industry, and more. The NYU Stern Executive Education team interviewed Professor DeRose to discuss everything from the future of Fintech, what students will gain from her upcoming online course, to the social implications of the emerging area of Fintech.
You were recently named one of the 100 Top Women in FinTech. What are the important shifts you’ve seen in this space as more and more women play leading roles at companies shaping the financial technology sector?
Professor DeRose: We’ve seen huge progress, but there is also much further to go. It would be great if the playing field in every industry and in every location was truly open to people from all overlooked groups, whoever they may be. We need to make economic opportunities equally available to all qualified candidates. If fintech can enable that by making financial services more inexpensive, transparent, and accessible, that is great. We should note, however, that increasing technology does not guarantee a more objective setting, since many technologies still produce biased decision-making, whether it is facial recognition that misidentifies people of color, or machine learning algorithms that rely on data with imbedded biases and just end up replicating decisions from former smoky backrooms. Tomorrow’s fintech leaders must do everything to make sure that data sets are bias-free, algorithms can be audited, and outcomes, whatever their good intent, are unbiased. Overall, it would be great to see finance careers continue to open up to participants from all backgrounds.
Would you please briefly describe the main takeaways you hope students will gain after completing the Foundations of Fintech online certificate course?
- Students will develop a working understanding of the technology-driven changes in financial services in each of the “big 5” financial functions: payments, money transfers, capital allocation, markets, and insurance. They learn about the parties involved in shaping these changes: incumbents, entrepreneurs, and investors. We use fintech startup case studies to delve into topics arising in business transformation and to assess whether the “promise” of fintech to lower cost, improve transparency, and increase accessibility is delivered or not.
- Students will gain insight into the foundational methods catalyzing business automation in finance, including blockchain and machine learning (when time permits in the longer or deeper courses) and into the core finance theories that inform our understanding of finance and whether fintech reaffirms or challenges this received wisdom.
Students will achieve a global perspective on developing fintech “regimes” mediated by local banking conditions, political/regulatory frameworks, (including attitudes towards privacy) and technology infrastructure that enables graduates to be fintech “citizens.”
What topics have students raised most frequently during the live online meetups?
Professor DeRose: Students often bring local knowledge to the forum discussions, which contributes greatly to the class’s shared understanding of fintech in a particular industrial domain or geopolitical setting. This is a really unique, fun part of the course.
Students frequently mention the proliferation of new sources of data that can inform financial decisions, including unstructured data.
What do you think are the greatest disruptions we’ll see in the coming months at the intersection of finance and technology, and how will they affect traditional financial services companies?
Professor DeRose: Ten years into the fintech revolution, there have been three big developments: the emergence of multi-billion dollar fintech “unicorn” companies that are automating finance in every business segment, a transition from disruptive competition to collaboration between incumbents and startups, and a global horse race to win the technology war to dominate fintech. The next ten years will no doubt see even greater changes, particularly as we collectively grapple with increased automation, which brings fresh insights into financial behavior, but also carries the risk of financial surveillance.
What are the social implications of this important area?
Professor DeRose: Fintech has an extraordinary promise to reduce the costs and increase the accountability of finance. But at this writing, up to one billion people globally still lack access to a bank account. To the extent that we can mass customize financial products and services at scale, that is a revolutionary development that will truly better many people’s financial lives.
On the downside, as we’ve all learned from spending too much time on our smartphones, technology influences behavior, and since financial behavior requires complex choices under uncertainty, behavioral biases can make our interaction with financial technology particularly vulnerable to bias, manipulation, and when combined with social media and e-commerce data, subject us to financial surveillance. Moreover, an all-seeing AI on a platform rapidly becomes smarter than any individual participant, improving efficiencies, but also enabling undesirable activities like cream-skimming the most desirable peer-to-peer loans, or front running client trades on a retail trading app.
Academic and industry research will be very helpful in making sense of these developments and informing possible regulatory and policy changes to manage some of these challenging tradeoffs. Overall, fintech is at the forefront of many exciting developments in business and society, and we design our fintech courses to inspire students to explore them.
Professor Kathleen DeRose’s Foundations of Fintech online certificate course will run from August 31 - October 12, 2020. You can find her full bio here and see other Executive Education courses taught below:
- FinTech for Executives: Understanding and Managing Innovation in Financial Technology
- Modern Finance Topics for Senior Executives
Browse our full schedule of upcoming Online and Live Online courses below.