Stevens Institute of Technology Moves Forward with FinTech Initiative
The Center for Research toward Advancing Financial Technologies (CRAFT) — an initiative led by Hoboken’s Stevens Institute of Technology and Troy, New York’s Rensselaer Polytechnic Institute — has concluded its first-year research projects and is looking to the future.
CRAFT, which has thus far been recognized not only by the state of New Jersey, but elsewhere in the United States and the world, conducts research on the fintech industry, while also educating current finance professionals and those seeking to enter the field of fintech by addressing business issues.
“We are very proud of this initial success, but I would say at the same time that it’s also a long journey,” said Steve Yang, an associate professor at the Stevens School of Business and codirector of CRAFT. He spoke about the formation of the center.
“We started this journey about four years ago with Rensselaer Institute, and we received an award from the National Science Foundation [NSF]. There are many research centers funded by the NSF, and many of them are focusing on vertical technologies — for example, quantum computing, big data, artificial intelligence and cloud computing — but this is the only one focusing on financial services and financial technology, and so we’re very pleased to be recognized as a leader in this field.”
George Calhoun, CRAFT managing director, is also director of the Stevens Institute of Technology’s Financial Systems Center, which figures prominently in the CRAFT initiative. Students at the center research solutions to actual business problems, thereby leading the way to the fintech future.
“We have dozens of courses that are taught in the two financial labs, and we built research relationships with some of the major industry players that we developed bilaterally before the CRAFT framework was put in place,” Calhoun said.
“But I think that commitment was one of the things that led the NSF to give us the opportunity to build the CRAFT center. The fact that we had invested so heavily in the financial technology space, even as a business school, was one of the factors that created the credibility that has led to the approval of this first-ever fintech center by the NSF.”
Over 10 companies that have joined CRAFT’s fintech-transformation effort, among them Goldman Sachs, Bank of America and Vanguard. In 2022, the organization identified seven research initiatives to be completed from June 2022 to May 2023, among them “Causal Inference for Fairness and Explainability in Financial Decisions,” “Explainable Machine Learning for Credit Risk Analytics” and “Fast Quantum Methods for Financial Risk Management.” The seven initiatives have been completed, and CRAFT is now selecting five new initiatives to be completed by May 2024.
Calhoun and Yang, who in May visited the United Kingdom and spoke with universities there about their possible participation in the consortium, recognize the obvious globality of the fintech industry. “The industry is global,” Calhoun said. “I think it would make a lot of sense to be able to link across the New York and London financial centers to address the growth of the industry.”
And according to Calhoun, the CRAFT initiative started in an appropriate place: yes, Stevens, but also in the Garden State, which is already a center of the financial services industry.
“New Jersey is really probably the growing half [ of New York and New Jersey] — because of many factors, but particularly because Manhattan is pretty crowded at this point,” Calhoun said. “On one hand, when the industry expands, a lot of that expansion is happening in New Jersey. On the other hand, you have a governor [New Jersey Governor Phil Murphy] that comes from that background, who understands the centrality of finance.”
Since finance is the largest employer in New Jersey, “there is a natural interest in building on that foundation, particularly to address the high-tech transformation of the finance industry that brings Stevens — and all the things we have been doing for the past 15 or 20 years — into the mix. We will have to take it step by step, but I think CRAFT is the foundation that a lot of people have pointed to as a beginning model for how to expand and make an even bigger footprint for this kind of innovative development of business and technology around the financial industry and its transformation.”
