Transcript
Chris Nelson: If you use your smartphone or computer to access bank accounts or pay bills, you already have some understanding of how technology and artificial intelligence have changed the financial industry.
My guest today is Ryan Christiansen, executive director of the Stena Center for Financial Technology. We're going to talk about the U’s new initiative to accelerate financial innovation. Welcome to U Rising, Ryan.
Ryan Christiansen: It’s great to be here. Thanks for having me.
Chris Nelson: So, Ryan, let's start with the word “FinTech.” Break that down for me because we're going to use it a lot in this conversation today.
Ryan Christiansen: So, if we're talking about FinTech, it's really about all those things that are financial services.
Chris Nelson: So financial and technology, those words come together.
Ryan Christiansen: That's right. So, it's these financial services that aren't a bank, but banks are really a critical and important piece of FinTech.
Chris Nelson: And I know as we've talked in the past, I use my phone, I go in, I move some money in my checking account to my savings account and it seems seamless, but behind the scenes there's a lot going on and decades of work.
Ryan Christiansen: Yeah, a lot going on. You can think about cybersecurity, you can think about database management. There's so many things going on. It might be helpful to talk a little bit about use cases.
Ryan Christiansen is the executive director of the Stena Center for Financial Technology.
So when you think about FinTech, what are those use cases? And it could be accounting, you think about Intuit's QuickBooks or TurboTax. It could be payments. I think we're all pretty familiar with the Venmos and the Cash Apps and Zelle. There's also a lot of money management, budgeting apps, things like that. There's Rocket Money, YAP, places that really help people budget their money or have insights into their money.
And then there's lending, which is a really fast-growing space in FinTech. There's a lot of behind-the-scenes companies, like LoanPro and SoFi and others, but there's also those that are a little bit more household names, and SoFi tends to be one of those as well. And interestingly enough, they now have a bank charter as well. So, we're getting the lines blurred a little bit between non-bank and FinTech. But there's others such as Brex and companies like the neobanks, Dave and Chime — some banks that are not really a bank, they are a brand that offers some products, but they use a bank in the background.
Chris Nelson: Does FinTech refer to purchasing as well? So, when I’m using Amazon and I buy something, is that part of FinTech or is that considered something else?
Ryan Christiansen: Yeah, so you look at the Apple Wallet, for example, and that wallet is driven by a lot of FinTech tools. And there, again, going back to these banks, they partner with a lot of traditional financial services as well. So you can link your accounts or your credit cards to these wallets, but in order to have that linking work, then you need to have those FinTech applications behind it.
Chris Nelson: Got you. Okay. So, we have the definitions now. Now we're going to talk about the University of Utah's connection. But let's start with your connection. So, you were a senior person at MasterCard, you were at Zions Bank, I believe as well. What made you leave the private sector and come to the University of Utah?
Ryan Christiansen: Well, I'd have to say, first of all, President Randall is a very difficult person to say no to. That's how I would start that. But you are correct. I had a great role at MasterCard, really enjoyed what I was doing there in open banking. But it's important to note that MasterCard purchased a company that I was at called Finicity and I worked at Finicity for several years. When I was at Finicity, when I started, we were a startup, just a handful of us. And we were a small company working on really exciting new technology that grew over a number of years. But that's how we started.
Prior to that, I was working, like you mentioned, at Zions Bank and some other large financial institutions. And so, I knew about banking and, probably most importantly, I knew how to talk bank talk. That was pretty important in the early years of Finicity because we're working on partnerships with really large companies such as Rocket Mortgage, Chase Bank, Experian and others.
So having that banking background was pretty important. So over seven or eight years of Finicity, we were able to develop some products and form partnerships that resulted in developing entirely new ways of underwriting loans, like we talked about, creating credit files, making payments, as well as developing standards for an entire industry. We grew to over 800 people and had a very successful exit to MasterCard. And then with MasterCard, we were able to begin operating all these new technologies and innovations at scale with a global scope, which was really exciting.
So, I was running global open banking partnerships at MasterCard, which was super cool. So, if we go back to President Randall's office for a minute, it was pretty clear to me that he had begun to put together the pieces for a FinTech center that would have the same impact that I just described at Finicity. The faculty here at the U that's involved in FinTech, they're really unmatched in their passion and talent.
Chris Nelson: And let me break that down, because that’s both the business school and the Price School of Engineering as well. Those are the two primary colleges.
Ryan Christiansen: And the school of law. Okay. Yeah. So, you've got this wonderful faculty. You've got Troy at the Lassonde Center, that's built this world-class entrepreneur center, who's really mentored the center. And then you've got our donor, the Stena group that's led by Steve Smith, who's a real visionary. And he knows one speed and it's not the low gear.
Chris Nelson: And he was also with Xfinity. Is that how you got to know him?
Ryan Christiansen: That's right, yeah. And so as President Randall shared that vision and the people behind it, I was hooked. And it was a chance to, again, be part of a startup with a really well-established university that has a proven talent for developing world-class programs.
Chris Nelson: So, the Stena Center for Financial Technology, what are we trying to achieve there?
Ryan Christiansen: Well, our mission is to bring together our education and industry to really accelerate the financial and technological innovation that supports students, research and industry to expand and strengthen the FinTech ecosystem. And I think it's important to note here, we're new. I mentioned I was part of a startup, and so we started this center January of last year, so it is just one year into it. And we launched it with a thesis like you mentioned, that FinTech is a multifaceted industry with its major nexus points being the disciplines of finance, computer science and regulation. And with that mission and thesis, we really set out to form some important partnerships.
Chris Nelson: So, knowing some of this is aspirational still at the practical level, programs, activities? If I'm a student and I want to be part of this, am I majoring in FinTech or am I majoring in business? How do I connect as a student?
Ryan Christiansen: Probably the easiest way to describe this is that we have four program areas and the programming falls into these four areas of academics, industry partnerships and labs, venture capital, and our annual conferences, which is where we try to bring it all together. So within the academic program, we're supporting the faculty and the students in a variety of ways. We've provided funding for research, funding for academic chairs and for labs. So, we're also providing our industry expertise as an input into the development of classes and degree programs, which includes a master's program that's currently in development. And we provide scholarship funds for students. And the center also provides access to industry platforms, which is really critical. And along with the access to the platforms, we get access to the industry professionals that run those platforms.
So, for example, we're running a capstone project that students can participate in working directly on a platform they may be working on in their first job right, so, they're getting that practical application. So a lot of opportunities for students and faculty there. And then within the partnerships and labs area, quite frankly, this is what we see as the jet fuel for the students and the faculty. That's where we work directly with these industry partners to bring in real world questions or problems into the academic setting. that includes, like I mentioned, this research and practical applications of our educational programs to support product innovation and development. And so, it might be easy if I give you a couple of examples there. Within these partnerships, I'm going to highlight one, we've got LoanPro that, like I had mentioned, is providing us access to their platform.
So when I say platform, this is the system that all of LoanPro's customers touch when they are a customer of LoanPro. That platform is made available to students along with some problem statements that LoanPro has brought in. And our students can now work directly on that platform to fulfill some capstone obligations they have for their degree, and then also work directly with the LoanPro professionals so they can get that back and forth to help accelerate their learning. And it might even be a place they decide to go to work right out school, so LoanPro is getting a chance to see some of the students at work and the students are getting a chance to see this application at work.
Chris Nelson: These are primarily business students in that scenario?
Ryan Christiansen: No, the particular capstone project that I'm mentioning with LoanPro, that's in the school of engineering.
Chris Nelson: Okay. So on the technology side, interesting. Yeah. Yeah, I mean one of the things I think the center really articulates is I think, this growing trend, especially with President Randall, is the university, is these centers as a linkage between the private sector and the university. Maybe talk about that because at universities we're deep thinkers and it's these big ideas and the private sector is so good at operationalizing, I think, and it feels like your center, in particular, is just kind of merging these two worlds a little bit.
Ryan Christiansen: And that's where this industry labs and partnerships piece is really so critical, that practical application of what's being taught and learned here at the university. So maybe let me focus on research for just a moment there. So, within research, there's a tremendous amount of fantastic academic research that happens here at the university. And there's also the opportunity to do a lot of industry research.
So, as an example, we have a company that came to us that has a nationwide platform for gathering deposits for small local banks. And there's some question because of a regulation that's been on the books for a very long time, long before FinTech, about how to treat these deposits. Are they core deposits? Are they broker deposits? It has a real impact on the balance sheet and the earnings of these banks. It also provides a way for these banks to continue to compete in a market that's now open to everyone.
You can live anywhere and bank with any bank. And so how do these local banks not rely so heavily on say, their branch network, but rely on their products and services that can reach a broad audience? So, we're doing research on whether these deposits should be classified as core, brokered, and it has a real impact on these companies’ earnings and balance sheets far, far into the future. So, to your point, that partnering with the industry is a pretty big deal. And I did want to mention there's a couple other programming areas, and we may want to get to this a little bit later, but we've got our venture capital group, and this is really providing direct investment into these early stage FinTech companies.
But another one that I'm really excited about coming up in the first of this February is our annual conference. And like I said, that's where we try to bring all these programming areas together.
And we assemble the very best in the FinTech industry, the leadership of the FinTech industry, but also the very best in academics and regulatory space as well. We convene this group of people and we discuss, learn and network with each other. And in that conference, we focus on really the major economic, technological and regulatory drivers that are impacting FinTech on an annual basis. And we invite select students to the conference as well so they can attend and hear what's being talked about. And what's really cool is we've also invited some of the students to present on the main stage some of the things they're working on. So, this is a fantastic opportunity.
Chris Nelson: And you've only been at this a year, but you've already got six graduates this past spring, and I assume that's kind of part of that. And you mentioned this, but these students will, what kind of job opportunities will they end up in, do you think, in the FinTech industry?
Ryan Christiansen: Yeah, I mean, I couldn't be more proud of these first graduates and the ones coming up behind them. We currently have 23 students pursuing the FinTech minor for this spring’s enrollment, which is fantastic. One year in and a good number that are also pursuing a FinTech emphasis in finance. So, it's an incredible trajectory we're seeing.
So, in terms of job opportunities, let me share with you what the Governor's Office of Economic Opportunity has to say about it. There's over 170,000 jobs in finance and technology in just Utah. Annual wages between $78,000 to $98,000. And that's from a 2021 report. And within the state of Utah, we have some of the leading FinTech companies in the country. That includes MasterCard, LoanPro, SoFi Paycom, MX, Atomic, Snap Finance and a lot of others. So, I can pretty confidently say there's abundant job opportunities.
Chris Nelson: Not a bad industry. Yeah, that's the great thing about the University of Utah. We train students and I think we give them the skillset to really adapt to industry changes.What is it about Utah that makes it such a good place for FinTech?
Ryan Christiansen: Well, if you look at the state of Utah, we really truly believe that Utah is becoming an epicenter of this global phenomenon of FinTech. And when I say global, I say it intentionally. If you look at some of the fastest growing populations and economies of the world, that includes Africa and India, it's where you're seeing some of the most incredible innovations in FinTech, and we absolutely believe that Utah will be at the forefront of that.
So what makes Utah special? If you go back and look at the history of Utah, we have really a pretty incredible story when it comes to finance and technology. First Fed chairman from the state of Utah, Marriner Eccles. You've had the industrial banks that were really developed in the state of Utah through the actions of the governor and the Legislature. And these industrial banks, it's really funny, they started out with this restriction against having a branch network because the regulators didn't want the industrial banks to compete with regular banks. And it ended up turning out to be quite an advantage for these industrial banks. So, within the state of Utah, you've got the majority of the industrial banks in the United States located here in Utah.
Chris Nelson: For those, maybe just quick definition of an industrial bank versus what they might see at …
Ryan Christiansen: Yeah, it might be easiest just to provide an example. So BMW has an industrial bank in the state of Utah, and their specialty is providing financing for BMW purchases. So, it's usually a company that has a specific banking need and they want to control that banking side of it. So, with BMW, they can do that financing. They have fairly specialized lending programs that don't have this broad, consumer banking build out. So that's the industrial banks. And it is an important component because with FinTechs, what you'll see is all the technologies being built up to what we call the banking core, which is the guts, the backbone of the bank, and then you have all this stuff being built on top of it.
So, I gave an example earlier of a company called Chime, which is one of the fastest growing neobanks, but they're not a bank. They are really a company that's providing banking services. They sit on top of a bank, they lease a bank to do all that accounting and regulation and such for them. And that's driving a lot of this technological innovation. And all the industrial banks are located in the state of Utah. So that combined with our long history of technological innovation, I mean, you look at the Novells, the WordPerfects, the Megahertzs, going back a long ways, even now to Adobes and Domo and some of these technology companies and the talent that that's created, as well as the talent that's coming out of the universities. I think that's why we're so well set up.
Chris Nelson: Interesting. That makes sense. Let's talk about the Stena FinTech X Studio incubator. Did I get that right? The Stena FinTech X Studio incubator? Now, this is not a University of Utah, but it is in partnership with us. And so, kind of give us an overview.
Ryan Christiansen: Yeah, it's kind of a mouthful. We've started referring to that as Studio X.
Chris Nelson: Okay. Studio X. I like that. I can say that.
Ryan Christiansen: So, we're really excited about what's going on with the studio. Like I mentioned, it's an incubator that supports FinTech founders across the state of Utah. So, if you are a student, a recent alum or faculty of any Utah higher ed institution, you can apply to come into this program.
And so what that consists of is we're giving direct funding to startups to help accelerate their business. We just completed our first pitch day where we had nine companies pitch for funding. We'll be announcing the first round of five funded companies shortly. As we get rolling along here, we'll generally be funding 10 to 15 companies a year, but since this is our first year, we want to make sure we're working out the kinks. So, we'll have five companies in this first round. The studio provides, like I said, a direct investment of between $100,000 and $200,000 into these companies to help them accelerate. And in addition to that, they get a few other things. One is access to an advisor and these advisors are seasoned company executives. Oftentimes they've been a founder or a senior executive at a technology or a finance company so, they've got very deep understanding of how to run and build a company. And they're pretty distinguished individuals with an incredible track record.
Chris Nelson: And these are all Utah, these are all Utah startups?
Ryan Christiansen: Primarily. The startups are all out of Utah. The advisors are mostly out of Utah, but we've got a few from outside of Utah that want to be a part of the incubator. So, in addition to the advisor and the funds that they receive for the company, they've got access to some other services, access to AWS credits for cloud computing, legal services that are donated by Cooley, which is a very large legal firm. They get access to marketing and branding services, IT services and a one-year development program that the center has put together to help them develop and grow their company, and then, lastly, they get access to incubator space, so this is a place where they can house their company. They get several hundred square feet within the incubator space and with these other founders. So they get a chance to have those creative collisions as well as create, like I say, this center of excellence in FinTech.
A really interesting aspect of this fund that you don't really see in other venture funds is the majority of the returns that are generated by the fund are contributed back to the Stena Center to create a perpetual funding source for the center, which is really exciting.
We'll eventually move this incubator space that I talked about into our new downtown location when that gets up and going, and we'll have another podcast about that, I guess. But that new downtown development, it'll house the center, the incubator as well as other companies that are in FinTech, large to small, and be this hub that we've talked about a little bit.
Chris Nelson: Yeah, so right now it's kind a virtual center in terms of space or living out of those colleges. Let's just talk about what's the vision? I know we're probably not ready to announce location or anything, but yeah, maybe just share that vision for . . . and why do we want to be downtown and not on the university campus in this particular case?
Ryan Christiansen: Yeah. Well, one, I think that downtown provides a lot of opportunities for a FinTech company that you don't necessarily find on a campus. A campus is built to be a campus, and so we want to create this public- private partnership where you have these incubated companies that are part of a university developed program, but also if you have a Google FinTech skunkworks project, they would want to come into that space as well, lease space to be around these student founders, around a student population, but have kind of a commercial presence in Salt Lake. And Salt Lake has really kind of helped develop itself as a real hub for not just FinTech, but other finance and technology aspects of the economy. So that's why we look at Salt Lake as an important piece of this.
Chris Nelson: But what a great experience for our students and also what a great economic driver for downtown Salt Lake. Let me use that as a segue into your role as the co-chair of the Governor's FinTech Council because as you've said a couple of times in this conversation, I mean, Utah really, I don't even know if we're poised, it sounds like we are becoming, at least, one of the leaders in this country, but talk about what the Governor's FinTech Council's all about and what's your role?
Ryan Christiansen: Yeah. First of all, Governor Cox has just been a tremendous supporter of FinTech here in the state, and I'm really honored to be a co-chair of the FinTech Council. He's really put together a group of FinTech leaders to help advise and accelerate what's going on here in the state of Utah. It's interesting, we talk about Utah being a hub. I was just interviewed by a publication, American Banker, for an upcoming article about FinTech hubs in the U.S. and this is in addition to the Stena Center and the state of Utah being featured in a Wall Street Journal article recently. So based on all that, I would say that the state of Utah ranks pretty high in terms of FinTech. And there is some research out there that lists Utah as one of the rising stars of FinTech as they look at various different aspects of what makes a hub.
And this research has defined Utah as one of the select few that are the rising stars. There's obviously the established locations such as the Bay Area, New York and D.C. But what we're seeing, according to the research, is that the rising star locations are experiencing significant growth over the more established locations. And here at the U, I know that we continue to see out-of-state enrollment rise, and that's in some part due to what the state of Utah has to offer. And as we continue to grow FinTech, there's going to be abundant opportunities for students as they complete their education.
Chris Nelson: Let me ask you this as we wrap up a little bit. The University of Utah, either a student here, you might receive care here, maybe you're doing research here, but it feels like in the FinTech space with the Stena Center, it is just that perfect marriage of training students, but also driving the economy. And so, as President Randall talks about the value of the University of Utah, I look at somebody like you who's spent most of their career in the private sector and is actually coming into academia, what's your message to other business leaders or lawmakers about the value that the University of Utah is bringing to the state?
Ryan Christiansen: Yeah, it's funny when you mentioned that I spent all my time in industry, even saying the word “spending time in industry” feels funny because I never thought of industry as this separate segment. I just knew that I worked at a company and didn't think about all these segments such as education and nonprofit and industry.
I think President Randall has it right in that education has done a tremendous job of educating a really talented workforce, very insightful founders of companies. But there's a piece there, that practical application, that's pretty critically important. And what's happened is industry's kind of filled that, but it's relatively expensive. It's a little bit chaotic. And being able to move some of that work into an academic setting, that practical application, I think it sets our students up to be more successful, more early in their careers, which is super exciting.
And I think what I'm seeing here at the University of Utah with the centers and being able to facilitate this educational and industry partnership, we're serving as a bit of a proof of concept around this whole idea because FinTech moves pretty quick. So, you can kind of see how it works. You can refine pretty quickly and see how that works and then refine again and see how that works. And within, let's say, the School of Medicine, there's been a lot of incredible innovations that have come out of that area. They take a long time. And so how do we make sure that we can continue to move quick? And I think the FinTech center has been one way that we can prove that out.
Chris Nelson: Nice. Good answer. Alright, my last question. Stena. Is it a name? Give us a breakdown of that.
Ryan Christiansen: Yeah. The background there is the really generous donation by the Stena Group, which is led by Steve and Jana Smith. So, it's consequently . . .
Chris Nelson: A combining names there.
Ryan Christiansen: . . . the Stena Center. Yes.
Chris Nelson: Very nice. Well, Ryan, thank you for being my guest on U Rising.
Listeners, that's it for today's episode of U Rising. Our executive producer is Brooke Adams and our technical producer is Robert Nelson.
I hope you'll tune in next time. I'm Chris Nelson. Thanks for listening.