FinTech

Financial technology, or fintech, is the buzzword of the moment in the finance industry-or at least it is to the swarm of startup ventures andventure capitalists enamored of the creative, disruptive ways that machine learning, cloud, blockchain, and other tech innovations can transform traditional processes and introduce new ones. Columbia Engineering's researchers are in the thick of the fintech revolution, many of them collaborating on projects under the auspices of Columbia's Data Science Institute, a multi disciplinary cross-University center that will use their researchand scholarship to help address the challenges and the opportunities presentedby a data-rich society.

In the private sector, Columbia Engineering alumni are leading fintech efforts in various segments of the financial industry. Global investment infintech startups passed $17 billion in 2015, but it's worth remembering-says University Trustee Armen Avanessians (MS'83), the global head of quantitative investment strategies at Goldman Sachs-that the banking industry's overall investment in technology in the same period was $240 billion. Of course, he points out, Goldman and most other big banks are laserfocusedon the fintech startups and are watching and investing in-and, insome cases, adopting-their innovations.

Among the fintech research projects underway at Columbia Engineering, Professors Garud Iyengar and Vishal Misra are developing a cybersecurity risk model that ranks the hardiness of a computer network, much like a credit score card ranks credit worthiness, and that will underpin a nascent cyber insurance industry. Professor Agostino Capponi is studying how humans and machines can efficiently and effectively cooperate to maximize investment returns, a relationship he refers to as "risk-sensitive Bayesian learning."Professor Shipra Agrawal is employing reinforcement learning to optimize adecision-making model for portfolio management that's responsive to the state of the outside world. Professor Allison Bishop, on a leave of absence, isusing supervised learning techniques to support the mission of a startup stockexchange to increase fair and transparent access for issuers and investors. Inaddition to fostering greater market efficiency, their collective work will helpensure a more connected and secure humanity.

A small sample of alumni who work in fintech-related businesses includes TomFortin (BS'86), the chief operating officer and managing partner at iCapital, a fintech platform that simplifies access to alternative investments, such asprivate equity and hedge funds, for high-net-worth investors and their advisors. Eric Poirier (BS'04) is the CEO of Addepar, an investment managementtechnology company that offers an integrated financial software platform for financial data aggregation and reconciliation, investment portfolio analysis, and client reporting needs. At Goldman, Avanessians's team, while not a fintech startup, regularly integrates machine learning, natural language processing, andother AI techniques in its effort to create and optimize a systematic approach toinvesting. Avanessians recently funded the new position of Avanessians Director of Columbia's Data Science Institute, to which Jeannette Wing, formerly corporate vice president of research at Microsoft, was appointed last spring.

By Marilyn Harris