This course provides a broad-based understanding of the financial services industry and considers fundamental questions about its future. Although those perspectives are based upon global and historical understanding, we take advantage of our New York City location by focusing on particular aspects of today’s New York financial institutions and financial innovators.
Financial services is an industry in the midst of dynamic change at all levels. Structure and performance are presently being influenced deeply by public policy and regulatory changes. The future is promising significant disruption (creative destruction), especially in the context of new technological applications and demographic shifts that will change the ways that financial services are delivered. Declines in average returns (from over 20% in the early 2000s) are applying competitive pressure that will hasten the transformation of the industry. A robust financial sector remains at the heart of the U.S. economy, and all other successful developed and developing economies. This course will define today’s influences with an emphasis on the opportunities and perils that lie ahead. The course takes the form of an interactive dialogue, which combines academic analysis with practitioner perspectives about current operation, trends, and changes afoot. Practitioners will visit our class regularly, and we may make site visits to their firms.
Some of the questions we will consider include:
1. What are the key segments of the industry and how do the firms operating in those segments create value for customers and make money (yesterday, today, and in the future)?
2. Who are the customers, what do they need and how is this changing?
3. Which lines of business are synergistic, and what is the appropriate mix of services for different firms to provide to different customers?
4. How has recent regulation reshaped the industry, and how will it continue to do so?
5. How is technological change transforming the industry (e.g., FinTech)?
6. How do the competitive strategies of disrupters and incumbents differ?
7. What is New York City’s relevance to the local and global financial services industry?
Grading will consist of class participation (50%) and a final group project (50%). Groups will consist of three people, determined by the students. Students who wish to complete the project on their own rather than as part of a group are permitted to do so. Group project details will be posted when the class commences.
Henry Kaufman Professor of Financial Institutions
Charles W. Calomiris is Henry Kaufman Professor of Financial Institutions at Columbia Business School, Director of the Business School’s Program for Financial Studies Initiative on Finance and Growth in Emerging Markets, and a professor at Columbia’s School of International and Public Affairs. His research spans the areas of banking, corporate finance, financial history, and monetary economics. He is a Distinguished...