29 Nov 2019 17:52 IST

How B-schools can prepare students for a tech-driven finance industry

Concepts and their applicability are important but an execution skill-set is paramount

When the first industrial revolution happened, capital was considered the most important resource. Gradually, knowledge took over. It was recognised that knowledge is a resource, and its impact on organisational knowledge was immense. Undoubtedly, knowledge is power but the form keeps changing. Knowledge about finance ruled the industry for decades, but an era has commenced where technology could rule finance to a great extent. It might seem trivial right now, but could be a ‘must have’ a few years down the line.

Developing the right skill

There is no denying the fact that employability of MBA students, barring those from a few good B-schools, has seen a declining trend. This is truly indicative of the quality of students entering the job market. This is impacted predominantly by the lack of requisite skills. In the past few years, technological advancements have happened at a fast pace, leaving no place for ‘wait and watch’ or ‘trial and error’.

Successful organisations are ones that have been able to go with the flow, embracing change, and using it to their best advantage. A tech-driven industry needs tech-driven professionals too. It is the responsibility of B-schools to prepare students for disruptions such as artificial intelligence, blockchain, automation, and big data, which can be used for creating new business models and innovations.

Applying concepts

B-schools face two types of issues while training finance students. First, many of them are from non-finance backgrounds so getting them acquainted with domain knowledge is important. Second, those from a finance background are too confident that they know it all, so ‘unlearning and learning’ for them is critical.

With the advent of technology, these clusters need to be trained on understanding finance with technology in the forefront and the real challenge lies here. Take an example — in order to understand how the application of blockchain could modify the scope of audit, even for a statutory audit, the student should first understand how systems audits are done and should then be able to apply this knowledge in the context of blockchain to arrive at meaningful results. While both concept and applicability of the concept are important, a skill-set to execute the same is paramount.

The real gap lies in the application of concepts. Usually, students are unable to relate a concept to real life. This skill can be developed by making them discuss more about recent articles and creating an understanding of what businesses need. Students should be taught to be agile and have the right attitude to embrace change. Thinking differently should be encouraged. Data is only as good as the skills of the interpreter.

If a student is given customer data on credit cards, multiple inferences can be drawn, using analytics. Students should be trained on data mining and predictive modelling techniques to interpret the data set. When Ola launched in-trip insurance for riders at ₹1, they would have analysed their data to arrive at this value. Although, the amount seems minuscule, the same would have a positive impact on its bottomline. This was possible only when someone analysing this data was able to capture it.

Decision-making using analytics

Encouraging decision-making using statistics is helpful, as a good understanding of these tools will help students perform longitudinal analysis better, and also help them interpret results using the analytics. Tableau needs an understanding of statistical tools for decision-making. Training in these tools will make students swift and alert with number crunching.

A course on fintech must be launched and discussions in class should focus on existing vs future technologies to explain the fintech landscape. Although good B-schools are already doing it, more fintech events can be organised, where perspectives are shared and heard, and fresh inputs from young minds are encouraged.

Eliminating redundancies

Three decades ago, when computers were introduced in banks, SBI employees went on strike assuming there would be layoffs as a consequence. Gradually, when they were trained to work on computers, they realised that it was a blessing, and those who managed to upgrade themselves never faced the axe.

Every time a new technology is introduced, there are redundancies in the system which need to be addressed. Students should be made to understand how these redundancies can be overcome. B-schools should help students identify the gap and focus on developing useful skill-sets so that once they join the workforce, they are an asset to the organisation. The millennials are great tech adopters, given their early exposure to gadgets such as fitbits and smartphones, e-commerce, and online banking sites. The iron is hot, the need is to strike it at the right time to shape better careers.

(The writer is Assistant Professor, Finance, Great Lakes Institute of Management, Gurgaon.)