Technology has made sweeping changes to our daily lives, and the financial industry is no exception. Fintech, which generally refers to financial technology, is changing how companies do business and how consumers manage their financial lives.

“The technologies are changing everything,” said Ronnie Chen, UNI assistant professor of finance. “Fintech is making life more convenient for people. You can do literally everything on your cell phone now.”

Fintech includes things like mobile banking apps that let users make deposits to their bank accounts with their smartphones, and digital payment services, like Paypal, Venmo and Square. Fintech is also transforming the way people apply for loans, with many banks offering applications online, and how credit scores are determined, with credit bureaus using big data and artificial intelligence (AI) to determine scores. 

Many of these advancements came about after the 2008 market crash. Companies wanted to take advantage of the complacency of the financial services industry and as a result, fintech took huge leaps forward. 

Gen Z expectations

A whole generation is also growing up with the opportunity to perform day trading. Phone applications like Robinhood allow anyone to put money in the stock market and even buy partial stock in some of the biggest companies, like Apple or Amazon. The app has recently reached more than 10 million users and has forced larger companies to do away with their commission structures. 

Online e-commerce platforms, like Stripe, Venmo or the Cash App, have dramatically simplified peer-to-peer, consumer-to-business, and business-to-business transactions. The shift has been so dramatic that Generation Z (those born after 1997) is less likely than any other generation to have written a check in their life, according to a NerdWallet survey. 

But what comes with that is a necessary change in business education, as younger generations become more technologically advanced. 

Relationship building is key

“People are going to have to keep up with the trends, so education is going to have to change,” said Brett Olsen, UNI associate professor of finance. “We want our students to leave the university with the knowledge of what information is out there and how to use that information to do things more effectively.”

Artificial intelligence is another integral aspect of fintech. Combined with the ubiquity of mobile banking, this is changing the job market for people in finance. Not only can AI do things like detecting potentially fraudulent activity in users’ bank accounts, but automated financial advising is becoming more common. Companies like Mint, an online budgeting tool, gives you guidance on how to manage your money. 

“They call it robo advising. It’s a piece of technology that will evaluate your portfolio or certain characteristics about you or your wealth … and then it will give you advice about how to invest your portfolio,” said Ryan Flugum, UNI assistant professor of finance. “Five, 10 years ago, this was an individual who would do this. It seems that this piece of technology is eliminating the role of financial advisor.”

Fintech is changing many aspects of work in the financial sector. Many financial companies are looking for employees to work more like analysts rather than traditional number-crunchers. Since big data — which generally refers to a large amount of data available — is more available, organizations need someone to look at the numbers and make decisions.

Curt Hudnutt (Finance ‘99, MBA ‘08), president and CEO of American AgCredit has seen first-hand how technology can change work in the financial industry — and which skills have maintained their importance. 

“When I started 18 years ago, we still used paper and pencil for a lot of things. Over that 18 years, pretty much everything has been digitized or automated in some way,” Hudnutt said.  “Now, we're leveraging digitization, automation robotics and the integration of all those systems to take out all non-value-added tasks to allow our employees focus on adding value to our clients.” 

One of the biggest value adds is relationship-building, which is why soft skills are still a huge focus in business and business education. That’s where programs like UNI business college’s  Professional Readiness Program®, which covers soft skills as well as some basic hard skills, are crucial in today’s business environment. And with relationships come trust—essential in client retention and a quality end-user experience. 

Also important are data analysis skills, which AI can’t do quite as well as people. Big decisions, like a purchase or some guiding advice for clients, can’t be made by AI. Employees in the financial industry will still have to use their judgement and expertise to make a choice. 

“Fintech is amazing, automation is amazing … but they can not do everything,” said Chen, “That's where we people come in. That's where our finance students come in. You can ask the system to do calculations for you but your brain is making judgments.” 

UNI is preparing students to make these decisions while also understanding the capabilities, and limitations, of the technology. Chen said he’s incorporating more data analytics throughout his finance classes, and UNI’s business college now offers a business analytics major.