Robert Wardrop, alternative finance pioneer and MBA lecturer

New Venture Finance, an MBA elective  

At the start of his popular New Venture Finance elective, Robert Wardrop asks his MBA students questions that can prove awkward for some. “I enquire how many of them have invested in a startup professionally, either using their own money or raising finance. Many of them have. Then I ask what the outcome was. Most of them have either lost money or not exited yet.” 

The MBA elective course is designed to provide students with insight into how they can make better decisions and improve the terms on which they finance new ventures, as either an entrepreneur or an investor. The students are in the right place to improve their outcomes and Wardrop builds on their personal experience in his teaching. 

“Around 25% of my teaching sessions are contributions from the students. Each cohort is so engaged and the group this year has one of the strongest experience base and frame of reference that I have ever encountered.” Wardrop’s most recent assignment to the group was to scope out 5 alternative investors for RegGenome, the University of Cambridge spin-out, of which he is both Founder and CEO.

Robert’s journey from Ontario to the UK 

Robert Wardrop can talk to his students from personal experience about making the pivot from marketing to finance too. A graduate of Queens’ University, Kingston, Ontario, he started his career as Brand Assistant at Procter & Gamble, before embarking on an MBA at the University of Chicago Booth School of Business.  

“My undergraduate years were wasted on me intellectually, I wasn’t mature enough, though I had a great time. The intense, research-concentrated culture at Chicago taught me the satisfaction of digging deep. 

My MBA was hugely impactful. Many years later, when I applied for my PhD at Cambridge, Mark Zmijewski, Deputy Dean, when I was a student and now Professor Emeritus at Chicago, was very helpful. Other Chicago faculty members, particularly Ron Burt and Luigi Zingales, encouraged me to pursue my desire to analyse finance through a sociological lens.”

A financial portfolio for a US family office 

After his MBA, Wardrop spent a decade responsible for a portfolio of European corporate debt and equity investments for a large US family office.  

“As the financial crisis unfolded around us in 2008, it became obvious to me that credit risk ratings were not taking into account the sociology that influenced decision-making at the corporate level. Private family run businesses were taking very different paths to those run by, say, private equity groups. 

Wardrop believes that his drive to study for a PhD has similarities to the tale of ‘The Princess and the Pea’. “I had found my pea – an intractable problem that kept me up at night, a puzzle that I could not immediately solve but was drawn to understand.” In 2010, he made another pivot to become a University of Cambridge PhD mature student.  

“I was up for a switch. I was finding more of the same in traditional financial markets and my need to understand the way in which embedded social relations influence financial decision making had become all-consuming.” 

The title of his thesis was ‘The Role of Trust in the Divergent Development of Alternative Lending Channels in the UK and Germany’. Five years later, by now a Lecturer at Cambridge Judge, Wardrop co-founded the Cambridge Centre for Alternative Finance (CCAF).

Co-founding the Cambridge Centre for Alternative Finance 

Wardrop said at the time that the Cambridge Centre for Alternative Finance (CCAF) was needed because the world was in a period of structural change, not cyclical, change. “The changes that are underway in the banking system and the way in which finance is provisioned are permanent.” 

The CCAF opened in January 2015. The intention from the outset was to create a different kind of co-disciplinary research centre into alternative finance. The Cambridge Centre for Alternative Finance was the first of its kind in the world.  

“The nature of alternative finance research lends itself to different business models which are very dynamic and often technologically innovative. But the publication of academic research can be frustratingly slow.” Wardrop says now. 

“Our agile structure allows CCAF to attract research funding beyond the traditional sources and publish impactful research outside the traditional academic model. Plus, our technological leverage lends itself to very rapid large-scale deployment of our models.” 

“In 2019 we launched a hybrid online course on fintech for regulators, with weekly surveys. This allowed us to take the pulse of what policy makers in financial services were concerned about at any given moment of time around the world.  

When COVID-19 hit in March 2020, and suddenly there was no physical supervision of what was going on in banks, we were able to identify straight out where the regulators were having problems.” 

A pilot software tool was launched at CCAF, aimed at streamlining insights into regulatory obligations for fintech firms across various countries. But researchers soon hit a stumbling block – there was no standardised information structure capable of representing regulatory data in machine-readable form. 

Leading new technology in the sector, with the Cambridge Regulatory Genome

Wardrop and his team’s response was to leverage foundational technology to develop the Cambridge Regulatory Genome (CRG), an open information structure streamlining the organisation and comparison of regulatory obligations across jurisdictions. 

With 2,000 regulators across 150 countries already signed up for its online courses, Wardrop approached the UK government’s Foreign & Commonwealth Development Office with his findings and soon received research funding and support for the CRG.  

In September 2020, Wardrop co-founded RegGenome as a commercial spinout of the CRG. A provider of structured regulatory content for next generation compliance and risk management applications, Wardrop’s aim for RegGenome is for it to be best in class in the emerging field of computational regulation. Regulation published in human-readable form, typically as .pdf documents, is not-fit-for purpose in regulated firms that are digitally transforming their business processes. 

“Digital transformation has had a disproportionately large impact in developing countries, with the risk of advanced technologies like Artificial Intelligence (AI) creating a further economic wedge. These regulators need our help to leapfrog away from legacy financial services. 

CCAF is right at the forefront of driving leadership amongst policy makers in the evolution of digital finance. Through the CRG we influence global standards for the regulatory community and the network of large financial services providers. Never has it been more urgent.”