Blockchain becoming all the rage at US business schools

Mon, Nov 06, 2017

New York

US business schools are beefing up training in the software that underlies digital currency bitcoin, a technology expected to be a game changer in many industries.

The move makes sense as more students seek careers in financial technology, or "fintech", which has captivated leading Wall Street banks and been called "the most important technology since the Internet". In January, the Haas School of Business at the University of California at Berkeley will offer its first ever course in blockchain software.

The Haas school, which is near San Francisco and Silicon Valley, will handpick 60 students from the departments of business, engineering and law, and split them into groups of six to explore possible applications of the technology.

"When people think about blockchain they think about cryptocurrencies," said Haas school lecturer Greg LaBlanc, who sees the technology as potentially disrupting many sectors.

"We believe it will have the biggest impact on contracting, logistics and supply chains, healthcare, public administration, assets clearing, property, transactions," he said. "Pretty much every function of businesses is going to be affected by this."

Blockchain runs by recording transactions as "blocks" that are updated in real time on a digitised ledger that can be read from anywhere and does not have a central record-keeper. It was originally developed as the accounting method for bitcoin. But while that cryptocurrency remains controversial with some players in finance, bankers increasingly see exposure to blockchain as a must.

Blockchain is "something we are very optimistic about", JPMorgan Chase chief financial officer Marianne Lake said. Newer technologies could be "very transformational for the financial services industry and we are forward-leaning and optimistic about that", she added.

The technology, which lets users trace items back through their supply chains, could also offer a means to limit tainted food problems, or to guard against "blood diamonds" that come from a war-ravaged area.

In finance, blockchain could be used to permit parties to check the solvency of counterparties, significantly reducing costs.

Training students for that function and other evolving roles in finance is altering curricula at universities and shifting how students structure their programmes.

Students who wish to work in trading must learn how to code, while bankers need to understand algorithms and big data to be able to attract new clients and devise stra-tegies for fast-changing markets.

But if exposure to fintech has become more important to hireability, traditional skills such as accounting, mathematics and understanding of economics remain the top criteria for recruiters, the schools say.

Fritz Foley, a finance professor at Harvard Business School, said that jobs in this sector still "require strong analytical abilities, an understanding of institutional details, and good judgment".

He added: "These requirements have not changed as innovations have occurred." AFP