Stevens Institute of Technology is one of two universities in the country that have been awarded the first-ever National Science Foundation grant to create an industry-university cooperative research center devoted specifically to financial technology and science, the school announced last week.
Officials from Stevens will team with officials from Rensselaer Polytechnic Institute on the Center for Research toward Advancing Financial Technologies, or CRAFT, as it will be known.
CRAFT, which will be led by Steve Yang and George Calhoun of the School of Business at Stevens and Aparna Gupta of the Lally School of Management at Rensselaer Polytechnic Institute in Troy, New York, underscores the nation’s strategic investment in managing risks and unintended consequences of the emerging — and yet unknown — challenges facing the high-tech financial services industry.
Stevens and Rensselaer will bring together industry and academic partners, and policy-makers involved in high-impact research efforts, to conduct research that is relevant for industry and has potential for commercialization.
CRAFT is expected to receive approximately $1 million in funding in the initial year of operation, with $300,000 provided by the NSF in annual increments over the five-year grant period and the remainder funded by its industry members. Stevens will serve as the administrative lead institution, in compliance with NSF’s newly-issued rules of designating a lead institution for all industry-university cooperative research centers.
Yang, who led the grant proposal from its inception, said the potential of the program is enormous.
“The federal government’s investment in CRAFT demonstrates the critical need for collaborative fintech research and policy initiatives to guide the industry in this high-tech transformation,” he said.
“Stevens’ location in Hoboken, and expertise in both technology and business, coupled with our strong relationships with financial firms, make us well-positioned to be a true partner in applied research to corporations as we look to grow the number of university and industry partners.”
Already, 18 financial services organizations, including global leaders of the industry, have pledged their support for CRAFT. As advanced technologies are rapidly shaping financial services and systems and impacting society at large, commitment from industry partners and policy makers will help drive innovation in fintech, address the challenges impacting the finance industry and help develop a diverse, exceptionally skilled high-tech workforce.
Among the initial research areas of focus will be cybersecurity; high-frequency automated markets; technology risk and regulation; commercialization; and applications of blockchain, quantum computing, natural language processing, artificial intelligence and machine learning. Much of the work on the CRAFT research projects will be carried out by students at the participating universities, providing an essential training ground for the future fintech workforce.
The Hanlon Financial Systems Center, which includes two game-changing financial analytics labs, challenges students in Stevens’ fintech-related bachelor’s and master’s degree programs to apply fintech solutions to real-world business problems. This resource, paired with Rensselaer’s specialized master’s degree program in quantitative finance and risk analytics and other key fintech assets and programs, will be key to advancing the CRAFT agenda.
Gregory Prastacos, dean of the School of Business at Stevens, sees big potential.
“This is a crucial opportunity for industry and academia to work together to define the most pressing challenges and find solutions that will have a real and lasting impact on the economy,” he said. “The aim of these research projects is to produce innovative fintech products and services, while also enabling industry participants and policy makers to better understand how to reduce the possibility of unintended consequences and disruptions.”
In the past few months, those disruptions include the short squeeze on GameStop and a major computer attack that crippled nearly half the East Coast’s fuel supply this month, leading the Department of Homeland Security to move to regulate cybersecurity in the pipeline industry for the first time. CRAFT will address how to both address and mitigate these challenges as financial services industry continues its rapid transformation into the high-tech, Big Data world.