Mission & Focus
The rise of fintech exposes a critical gap between the world of traditional finance and the emerging fields of advanced technology that are now coming online, somewhat piecemeal, inside many parts of the financial system. CRAFT’s mission is to assist the industry in achieving a great coherence in fintech research and policy to bridge this gap. The Industry/University Cooperative Research Center model brings industry and academic representatives together to define a research agenda to support this overarching goal. CRAFT is also intended to serve as a common forum for companies that might normally view themselves as competitors, and find it difficult to achieve a collaborative mode. CRAFT will facilitate a richer and less conflicted collaboration to address topics of common industry-wide concern. CRAFT also will have participation from representatives of the government world, including the major financial regulators, and can provide a forum for industry members to interact with and influence public policy and regulation in this field.
Industry-University Cooperative Research Center
CRAFT and the National Science Foundation created the Industry-University Cooperative Research Center model over forty years ago, to focus research attention, and build institutional support related to critical fields of science and technology.
The IUCRC model was designed around three primary objectives
Conduct high-quality, high-impact research to meet shared needs of key industry constituencies (in this case, the financial services industry)
Enhance U.S. global leadership in driving innovative technology development (in this case, fintech)
Recruit, mentor and develop a diverse, high-tech, exceptionally skilled workforce
Key Governance Features of the NSF IUCRC Model
The IUCRC format is based on decades of experience and research success. There are more than 70 IUCRC’s in operation currently. The legal and operational framework is well-established. IUCRC’s have a long track record in attracting and engaging over 1000 industry partners from many industries.
The model provides tested templates for key “constitutional” documents and policies, including
for several categories of membership
Center By-Laws, Operating Procedures, Budgeting
and other aspects of Center governance, specifying the roles and rights of Members in guiding the research agenda
Intellectual Property policies
for ownership and licensing arrangements: free non-exclusive licenses to all Members for technology developed by the Center (with options for exclusive licensing)
Confidentiality and Publication policies
to share research outcomes appropriately
The IUCRC Format Promotes Cost-Effective Research Investment
The success of the IUCRC draws on key aspects of its funding mechanism:
The National Science Foundation matches members’ contributions, and NSF funding is entirely directed to supporting the administrative costs of the center
Members Funds Go to Research (not overhead)
NSF’s support of operating costs means that 90% of members’ funding can go to support research – a much higher percentage than other forms of university research funding
Members Benefit from Leveraged Research Investment
As a consortium, an individual member’s funds are amplified by the contributions of other members. On average (based on past IUCRC experience), every $1 of an organization’s membership fee accesses $42 of research investment (avg from 2015 data).
The IUCRC Builds a Community of Interest
The IUCRC is a unique forum for industry partners – who normally compete with one another – to collaborate on challenges of common interest to their industry
The IUCRC provides a channel for industry Members to interact with government
regulators, and influence thinking on regulatory and legislative policies
A. General Questions Related to the IUCRC Model
1. What is an IUCRC?
An Industry-University Cooperative Research Center is a long-established research center format, created and overseen by the National Science Foundation, to sponsor high-quality research that: · is of strategic national significance, and promotes American technological leadership · focuses on science and technology problems that have not received sufficient research attention, or require a more coherent multi-disciplinary approach· focuses on problems that benefit from the involvement of both industry and academic leaders
2. What else does an IUCRC do?
The IUCRC model is also focused on development of a diverse, highly skilled science and engineering workforce. It can act as a recruitment pipeline for industry members to gain access to students who have actively participated in Center-sponsored research.
3. How many IUCRCs are there?
The IUCRC model has been in use for almost fifty years. There are over 70 IUCRCs in operation today, involving more than 100 universities and over 800 industry members.
4. How is an IUCRC governed?
The NSF model for the IUCRC includes a well-vetted governance model, based on two key policy-making bodies:
· The Industry Advisory Board (IAB) — made up of representatives from all industry member organizations
· The Academic Leadership Team (ALT) - comprised of the Principal Investigators (PI’s) and Co-PI’s from all the university sites in the IUCRC consortium
5. What is the role of the IAB?
The IAB oversees the general operation of the Center and reviews all research proposals. The IAB prioritizes these proposals and makes recommendations to the ALT for funding.
6. What is the role of the ALT?
The ALT makes decisions to approve IAB-recommended projects for funding and supervises the overall performance of the funded research.
7. How is an IUCRC funded?
An IUCRC is principally funded by its industry members, who pay an annual membership fee, and by matching funds from the National Science Foundation. Participating universities support the cost of key academic personnel (PI’s and Co-PI’s).
8. How much does it cost? What are the Membership Fees? See the membership page.
9. What are “in-kind” contributions?
A member, in any category, may contribute resources to support the Center’s operation. These could include proprietary databases, software tools, or technology and equipment that can be used by the Center to support approved research projects.
10. What are members’ voting rights? Full members have one vote on the IAB. Associate members have one-half vote. Affiliate members participate in IAB meetings as observers, but do not vote.
11. Who can be a member? Any company or government organization, or other non-profit organization can become a member of the IUCRC.
12. How long is a member’s commitment? Members’ fees are paid annually. Members have the option of renewing their membership each year, for five years.
It is hoped (but not required) that members will continue to support the IUCRC for the full five-year term of Phase 1 of the Center’s operations. Members can terminate their membership by giving six months’ notice.
13. How much does the NSF contribute?
The NSF provides $150,000 per year to each university site. NSF funds go to support Center and Site administrative and management operations, not research.
14. What do the Members’ fees support?
90% of funds derived from Members’ fees go to support approved research.
15. How are research projects selected?
Faculty members from each University Site propose projects in writing and give short presentations at annual meetings of the IAB. The IAB members vote on projects of interest to them.
Note: First year membership fees may be directed to a specific project of interest to the new member company. Project renewals are subject to the IAB voting process.
16. What is the IUCRC Policy on Intellectual Property Rights?
The IUCRC model includes a well-established policy on IP, based on the following principles:
· Ownership of the IP and technology emerging from the Center’s research is held by the Universities, for the common benefit of the Members
· All Full and Associate Members have a royalty-free, non-exclusive license to use Center-developed IP and technology
· There is also an option for individual Members to negotiate an exclusive, royalty-bearing license
B. Questions Related to CRAFT
17. How is CRAFT unique?
CRAFT is the first IUCRC ever approved to focus on the emerging challenges of the high-tech financial services industry.
18 . What is the basis of CRAFT’s expertise?
CRAFT’s founding universities – Stevens Institute of Technology and Rensselaer Polytechnic Institute – are premier science and engineering universities, long-established and experienced in research programs, with a complete portfolio of relevant scientific disciplines appropriate for the fintech focus.
19. Will other universities join CRAFT?
Yes. Stevens and RPI are recruiting additional university partners now. Several prestigious universities have expressed interest, and we will provide updates as these discussions bear fruit.
20. How will CRAFT priorities be established?
That is the main operational purpose of the IUCRC. Members will interact with personnel from the university sites to develop actual portfolio of research projects, to be proposed to and reviewed by the IAB. The definition of the actual research agenda for CRAFT will be a fully collaborative enterprise, involving both the academic and the practical industry perspectives.