[MUSIC PLAYING]
GARY GENSLER: We can use technology
to make finance more inclusive and more
accessible to many more millions of people in our country
and many more hundreds of millions
of people around the globe.
SARAH HANSEN: Today on Chalk Radio, modern money.
In this episode, we're taking a look at 15.S08 FinTech:
Shaping the Financial World.
This is a course, about money and how
it works in a constantly changing digital environment.
GARY GENSLER: My research and teaching
is all about the intersection between finance and technology.
And what better place to do it but at MIT?
SARAH HANSEN: Our guest today is Professor Gary Gensler.
He co-directs MIT's FinTech@CSAIL,
which stands for Computer Science and AI Lab.
Professor Gensler has a unique perspective
in that he's teaching a subject that's continuously evolving.
So how does an educator teach something that
changes so much and so rapidly?
How do you prepare students to work
in a new and, oftentimes, vastly different
context, one that literally might not even exist yet?
But before we dive into all of that,
we first have to understand, what is FinTech?
GARY GENSLER: This term, FinTech,
which came about in the last 20 or so years,
can mean different things to different folks.
For me, I think of it as how is finance changing
due to new technologies?
And the original FinTech was money
itself invented thousands of years ago by humans.
But usually, a lot of folks these days
will call FinTech the companies that
are disrupting the world of finance using machine
learning or using something called blockchain technology.
But 20 years ago, it would be correct to say
that what technology was disrupting finance more
than anything else was the internet.
And 10 or 15 years ago, the technology
that was disrupting finance the most
was mobile phones and cloud.
And so I teach it from a broader view
and try to prepare students with this concept,
so they're ready for the 2030s and the 2040s.
What technologies then will be highly disruptive in finance?
It's really about how technology is changing
the world of finance and has for centuries
and will for centuries to come.
And right now, we're living through
this transitional period of machine learning,
artificial intelligence, Internet of Things,
blockchain technology.
In a decade from now, it will be some other transition.
And so I really try to engage the students
on what that means, what those big technology movements mean
as they come into the technology stack,
and then they just become accepted.
[MUSIC PLAYING]
SARAH HANSEN: In helping me understand what FinTech
actually is, Professor Gensler made some really interesting
observations about the way we use money now
versus even just 10 years ago and what that implies
about where we're headed.
GARY GENSLER: That which we call money,
that which Plato and Aristotle called money,
was just society's representation of something
of value.
But boy, in the 21st century, aren't we there--
that you can just wave your mobile phone,
and you move value--
what we call money.
The greatest changes of the early 2020s
is about two forms of artificial intelligence.
One is machine learning.
Machine learning has a remarkable ability
to extract correlations in data where
we couldn't find it earlier with earlier forms of math--
linear algebra and so forth.
And the second form of artificial intelligence
that's dramatically changing finance
is natural language processing.
What do these words mean?
They're just kind of fancy words to say,
can you move human language to computer language?
And guess what?
All day long, that's happening, and we're
starting to get robo advice.
And robo advisory platforms can deliver finance far more
broadly to far more people.
So Bank of America has its voice assistant, Erica.
But millions of their customers are now using Erica--
[LAUGHS]---- to do modest transactions--
move bank balances around, things like that.
So we try, in the classroom, to think about this with students
and sort of prepare them.
What are the next technologies?
Not just the technologies like machine learning
and natural language processing, but what
are the next technologies?
And how do we think of entrepreneurial strategy--
how to think of the strategy to use new technologies to provide
services.
And then the classic way that you always
have to think about as an entrepreneur--
how can you do something better, quicker, cheaper that's not
been done today?
[MUSIC PLAYING]
SARAH HANSEN: During my conversation
with Professor Gensler, I began to realize
how far-reaching the implications of FinTech can be.
Expanding access to financial literacy
is a really important outcome that drives his teaching
and his passion for the work.
GARY GENSLER: What I was drawn to MIT
about was this sense that maybe we could democratize capitalism
a bit more, that we can use technology
to make finance more inclusive and more
accessible to many more millions of people in our country
and many more hundreds of millions
of people around the globe.
New technologies come along every decade or so,
and then they disrupt the status quo.
And what's really exciting is, at MIT,
we're at the forefront of those new technologies.
And we can bring those practices, those new practices,
into the classroom and say, well, now
what's this doing to finance?
What does it mean that a big technology company is starting
to have a credit card, maybe?
What does it mean that Apple credit card exists, or Facebook
wants to have a worldwide currency called Libra
or that we might provide insurance that's
going to be measuring our Fitbits
or watches or our mobile devices as to whether we're healthy
or not?
SARAH HANSEN: Students from all areas of MIT's Sloan School
of Management, and even students registered
from other schools, flock to Professor Gensler's class
to learn more about what the future of finance looks like
and how they might help shape it.
GARY GENSLER: Students come into this class
for multiple purposes.
But I'd say the majority are really interested how
these new technologies might be disrupting
a big part of an economy.
And the students are from all over the globe.
And dominantly, they're thinking about,
I want to understand how this technology is
disrupting finance.
So I asked all the students to write a memo, a clearly worded
recommendation memo.
But their recommendation-- they can pick one of three CEOs--
Jeff Bezos of Amazon; Brian Moynihan,
who runs Bank of America; or Mark Andreessen,
who runs a big venture capital firm, Andreessen Horowitz.
And I said, you pick whether you want
to write about the provision of credit,
the provision of credit cards, the provision of automobile
insurance, the provision of mortgages.
You pick whatever you want to pick in finance,
but you have to write a CEO recommendation
memo with a clearly stated recommendation to Amazon,
Bank of America, or Andreessen Horowitz.
And a little over half the students picked Amazon.
They were all really interesting memos to read.
And the students engage.
They engage because there's tremendous benefit
to giving students a real live thing to address.
It's a real live thing where I say, listen,
if this is a great memo, I'll figure out the way
to get it to Jeff Bezos.
I'll figure out the way to get it to Brian Moynihan.
And the students believe me because I could get
a really great memo to them.
Some students will say, can I write it to somebody in Brazil
instead?
And I always say yes.
Had a great memo to the CEO of Tencent, the big technology
network in China.
And it was one of the best memos this group of students
put together.
I would say to other educators, trust the students.
If you give them a little bit of an open-ended prompt like this,
a big majority will rise to the occasion.
SARAH HANSEN: As is the case with most things nowadays,
Professor Gensler's course is formatted a little differently
in the time of COVID-19.
But he's seen some pretty remarkable results
at achieving some semblance of normalcy
in his new class format.
GARY GENSLER: We're in very unusual times--
that those of us who learned our teaching
skills in the classroom with anywhere
from 15 to 100 students in the class,
that you are all having a shared experience.
All of a sudden, with a snap of a finger, we're online.
Most of us at Sloan felt it was really important to keep
some sense of community.
And so when I started the first class online,
I asked all the students--
those that could-- to listen together synchronously.
And so this class was taught at 8:30 to 10:00 AM
on Monday and Wednesday.
And so for many time zones, it worked.
But did it really work for somebody sitting
in Europe who had flown back?
So we did record it, but we got about 85% to 90%
of the students tying in synchronously.
And I felt it was not only important
that it was synchronous, but secondly, that everyone
had their video on.
And I would tell the students--
I said, I know that you might have
a friend, a spouse, a lover, a child walk through the camera.
You might have a delivery, which--
One day, I was teaching, and I had a delivery.
And there was a pounding on the door.
And I had to say to the students, excuse me.
I have to go to the door.
But I said, that's life.
We're going to relax about all of this.
But I felt it formed a better sense of community.
SARAH HANSEN: Before teaching at MIT,
Professor Gensler cut his teeth in the professional
and political world working for Goldman Sachs;
the US Department of Treasury; Hillary Clinton's campaign;
Paul Sarbanes in the US Senate, and with Barack Obama's
administration, chairing something called the Commodity
Futures Trading Commission.
His understanding of what makes a successful, well-equipped
professional shines through in his classes.
Gensler isn't just developing domain knowledge
but cultivating humans and professionals.
I want to read something to you that you've written.
GARY GENSLER: Oh my God.
This is the embarrassing moment.
SARAH HANSEN: [LAUGHS] No, it's good.
It says "respect and courtesy build reputations, networks,
and trust."
That seems important in your teaching.
So I'm wondering how your focus on helping students
cultivate professionalism kind of plays out in the course.
How do you teach that?
GARY GENSLER: So I think that each
of us that walk into a classroom have a big responsibility.
It's such a privilege to be at MIT
with this incredible student body and faculty and staff.
But I feel that we have this responsibility that goes
beyond our domain knowledge.
Of course, I'm in the classroom teaching finance and technology
and this intersection of how machine learning and blockchain
technology and Internet of Things
is changing the world of finance.
But I also think that when I look back
at the faculty members I learned the most from when I went--
I went to Wharton--
it was not about the domain knowledge
of accounting or finance or linear algebra or biology.
It was more about values.
It was more about professionalism.
And I've been honored to work at very high levels
of professionalism.
Often, the race goes to the person
who's prepped the most, who's been courteous, who
listens as much as they talk, who asks questions
that are relevant.
And I come back to that, not just in the classroom,
but I offer lunches to the students.
They sign up in an open signup forum
where up to eight students can sign up.
And I usually do this in person.
But what I found in this COVID time,
there was such a demand that I set up lunches twice a week
all through the six weeks.
And they were nearly always booked with eight students.
And we would just have no agenda other
than we would talk about careers and professionalism
and the like.
So maybe for some small percentage of the students,
it will stick.
And then I usually end my last lecture
in every one of my classes, and I do a quote
from Benjamin Franklin.
And Benjamin Franklin, believe it or not, spoke about money.
So I figure I get a little bit of a pass
if I get hokey on the last day.
And I bring Benjamin Franklin and this wonderful, warm quote
that you can look up about Benjamin Franklin and money.
But what he really is talking about is paying it forward.
He talks about if you should--
somebody does you a favor.
The way that you repay the favor is doing the favor to others.
And he says this is the best form of money he knows--
to redo a favor by paying it back to others.
I feel that those of us who are privileged
to be in these positions, if we can share that,
and it sticks with some percentage
of the students, that's as important-- maybe
more important-- than the domain knowledge and the domain
analysis.
I mean, I like to think we teach a lot more than knowledge,
that we teach a way of thinking.
[MUSIC PLAYING]
SARAH HANSEN: If you're ready to learn more about FinTech,
you can visit Professor Gensler's course materials
on our MIT OpenCourseWare website.
And if you're an educator who reuses
the materials in your own teaching,
call or write to us to share your story.
You'll help inspire others.
Thank you so much for listening.
And if you like what you've heard so far, please
consider leaving us a review wherever you're listening
to this podcast today.
Signing off from Cambridge, Massachusetts,
I'm Sarah Hansen from MIT OpenCourseWare.
CHILD: Ma, pahk the cah!