The dynamic landscape of the financial technology (FinTech) ecosystem has undergone rapid growth, giving rise to a myriad of innovative financial products and opportunities that extend beyond the boundaries of traditional finance.

In this article, Fairfield University Professor of Practice David Mangini, a distinguished financial technology expert, shares his insights into the transformative forces shaping the financial services industry. With a rich background that includes payments, digital currency, digital monetary systems, regulatory governance and strategic consultancy for central banks, Mangini brings real depth to his analysis. Drawing on this wealth of experience, he shares insights into the evolution of FinTech, shedding light on its influence on traditional banking, the emergence of startups and the indispensable role played by regulatory agencies. He also offers valuable insights into thriving career paths in the FinTech sector, accentuating the key roles of data analytics and artificial intelligence.

Why is FinTech such an innovative and important sector?

“FinTech” is changing the way all financial services are offered. Innovations in this technology improve the delivery of many banking and payment services and create new services that bring new value to providers and customers. Innovations range from the creation of new assets and digitalized currencies to the definition of new business models. FinTech innovations reshape the channels that connect these products and services to the market.

FinTech, a term often heard today, has been the basis of numerous innovations in financial services and has been on the rise since the 2008 financial crisis. FinTech is rapidly evolving right now because the technology that drives it is also rapidly evolving . New ways to develop and launch financial services have meant that innovators can quickly create and launch new services, and the expansion of mobile Internet access has meant that these services can reach anyone with a mobile phone. Key to this development was the opportunity to leverage cloud-based infrastructure available “as a service” from multiple sources.

The importance of FinTech is that it has the power to reshape the financial services market. New technologies allow new competitors to enter existing markets to offer new combinations of services that can appeal to a wide range of user groups. This increases competition and allows startups to generate new services according to new business models. This financial technology ecosystem expands choices for everyone. In particular, the use of these new technologies extends the reach of financial services to many populations that have been beyond the reach of the traditional industry, as is the case with microlending, which makes small loans to people or businesses that would otherwise not have access to such services. They.

Tell us about your background and how you got started in FinTech.

My FinTech journey has spanned several completely unexpected phases in my career. My FinTech career began in telecommunications engineering when I was involved in the design and implementation of some of the first cellular phone networks in the northeastern United States. My background in network technology and telecommunications led me to join IBM in the global communications sector, where we developed solutions for IBM telecommunications clients around the world. This included some of the first mobile payment systems, such as the M-Pesa solution that started in Kenya and was hugely successful. In the early 2000s, Kenyans had limited access to traditional financial institutions for monetary transactions. However, they had cell phones with access to mobile networks. A collaborative effort between public and private organizations created the M-Pesa solution, enabling money transfers via mobile phones. Since its inception, M-Pesa has expanded beyond Kenya and has over 56 million customers.

As payments technology evolved, I stayed involved as new projects using blockchain were introduced. It was then that Bitcoin and other very early cryptocurrencies were the focus of many experiments. Clearly, technology was driving many new innovations that had yet to find practical application. Digital currencies were also evolving as a possible form of national currencies issued by central banks.

This progression led to my involvement in several early projects at IBM to advance payment systems, early blockchain projects targeting enterprise applications and mobile payments.

Program director David Mangini

Tell us about one of your positions in FinTech.

Around 2015 I became an advisor to a FinTech startup in Switzerland that had developed a technology platform to allow central banks to issue their own sovereign currency in digital form. These are now known as central bank digital currencies. Until that time, central banks issued national currency exclusively in physical form in the form of banknotes and coins.

My role was to advise this startup in its efforts to educate central banks on the intersection of technology with the policies and processes of using central bank money in digital payments. This required a comprehensive understanding of the cooperative nature between technological innovation and regulated institutions. The focus is on how technology is used to advance governments’ policies and social objectives within their regulatory framework.

I have traveled around the world, meeting with institutions such as the Bank for International Settlements, the World Bank, the International Monetary Fund and the central banks of many countries to educate them about FinTech and how it combines with their money issuing policies and processes . After several years of collaboration with this startup, we brought their design concept into one of the first successful pilot implementations of a Central Bank digital currency with Banco Central del Uruguay in 2017.

Throughout these experiences, I have seen how technology evolves to create new opportunities and capabilities that can reach all segments of society across the established financial system.

What are the three main career paths in FinTech?

The financial sector has always offered a wide range of career opportunities, and this also applies to the wide range of emerging jobs in the FinTech sector. The top 3 FinTech-rich career paths include:

Startups: New businesses are constantly emerging to develop and offer services to new user groups in new ways. KPMG reports that the amount of venture capital funding for FinTech startups exceeded $115 billion in 2021. This rich investment area is creating FinTech career opportunities for those driven by startup excitement.

Consolidated institutions: No company in the financial sector is immune to FinTech. Established institutions across the industry recognize that FinTech offers new opportunities for efficiency, new services and expansion. Every major financial institution has established significant internal development funding to fuel their FinTech incubators. In addition to dedicated FinTech teams internally, these same institutions actively work with external startups in many collaborative projects.

Regulatory agencies: Policy makers and regulators play a crucial role in the development of FinTech. For any FinTech innovation to achieve widespread adoption, it must conform to the goals of orderly market functioning, consumer protection, and serving social good. There has been a strong recent trend for many regulators to dedicate dedicated resources to work alongside the FinTech sector to help guide and shape development. An important method here is the use of Regulatory Sandboxes which allow entrepreneurs to build and demonstrate their service in closed, private environments together with regulatory authorities.

What are the emerging FinTech trends?

FinTech is advancing rapidly on several fronts. The two largest areas are Data analysis AND Artificial Intelligence (AI). Data is the fuel through which many new services take shape and add value to existing services. Knowledge of data management and interpretation and privacy controls are critical to the advancement of FinTech. Insights derived from banking and payment data can be leveraged to increase the value of various other services.

Artificial intelligence will have applications in all institutions involved in FinTech. For financial services providers, AI will provide new insights into the connections between usage patterns. AI will be a powerful tool for regulators to identify money laundering and other oversight and compliance actions.

What is (one) piece of advice you would give to someone considering a career in FinTech?

There is more than one right answer on how to start a career in FinTech. The space is so large and the skills to learn are so many that I can’t think of a wrong way to get started in this field. Even taking the exciting and somewhat risky step of joining a startup will still be of great personal benefit. You’ll gain valuable skills and increase your marketability, whether the particular startup you join thrives or not. Likewise, established institutions are not sitting idly by as FinTech happens around them. Even more traditional institutions actively involve their internal teams in FinTech projects.

How does Fairfield University prepare graduates for careers in FinTech?

FinTech is constantly developing and expanding. This dynamic field offers many FinTech job opportunities for students to advance their careers. Embraced by both startups and established institutions, FinTech has opened up a very wide range of career paths.

THE Masters in FinTech program focuses on the impact FinTech has in changing the market structure for banking, payments, digital assets and currencies. Technology has brought an explosion of creativity in new ways to disrupt the market and bring services to more people in new ways. Data analytics training is an integral part of the program and provides expertise on the critical role of data as the lifeblood of new services.

The program highlights the role of FinTech in bringing new capabilities to finance and banking within the regulatory framework, ensuring that the benefits of FinTech can be adopted across society. Ethical adoption of technology in the financial sector will continue to serve society and serve as a driver for dynamic FinTech careers.

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