It’s collaborative, digital and forces students to make decisions when they’re facing time pressures and uncertainty. Take a step inside Harry Scheule’s bank simulation study and see how a little role playing can make business students’ learning go a long way.
The ‘bank simulation study’ is an assessment run in the Financial Institution Management subject during Autumn and Spring sessions. It’s the brain child of Associate Professor of Finance and subject coordinator Harry Scheule.
“We want to train students ‘on the job’, we want to give them skills they can apply in the workforce, and we want to set them apart once they leave university,” explains Scheule. “Materials across universities can be similar if they rely on the same textbooks and lecture slides, but we want to get students closer to the top. And this is where the simulation comes in.”
As part of the bank simulation assessment, students are split into groups of eight. Each group represents a virtual bank.
In each bank, the students are appointed to different roles including the managerial roles of Chief Executive Officer (CEO), Chief Financial Officer (CFO) and Chief Risk Officer (CRO); operational roles of investing, lending, and deposit taking; as well as two support roles – economist and industry analyst.
Scheule himself, who has access to the banks’ outcomes, acts as the prudential regulator.
Over five weeks, the students are presented with different tasks and scenarios to which they need to respond. The scenarios are generated by the same software that the American Bankers Association uses to train their bankers.
However, to make the content more engaging and to teach his students practical skills, Scheule has customised the software to make it more “game like”. To do this, he teamed up with learning and teaching assistants David Leong, Thi Mai Luong and Michael Tjendara.
Essentially, they’ve re-designed the software so there is a consequence, which cannot be altered, for every action the team members take or don’t take.
Scheule says, “It’s hard to show how the different areas of the bank are integrated, but in the simulations they learn how it all balances out and they no longer see content areas in isolation. Many students agree that this is the biggest benefit of the simulation.
“For example,” adds Scheule, “one lecture may be on lending and the next one on deposit taking, but it’s very hard to show how they actually integrate. In the simulation study, though, students can use a funds management table and see how changes in both assets and liabilities can be sources and users of funds.”
Last teaching session, Master of Finance student Victoria Macarthur-Stanham undertook the simulation study and held the role of CEO. In real-life, Macarthur-Stanham is a Business Development Manager at investment and wealth management firm Shaw and Partners.
“I found the simulation study hugely beneficial,” affirms Macarthur-Stanham. “It allowed me to problem solve in a manner that emulates a real-life business environment. Additionally, it solidified my understanding of the practical components of loans, deposits, securities investments, capital and funding sources and demonstrated just how interconnected the various departments of a bank really are.
“I now have the ability to effectively understand and execute asset/liability management and capital budgeting/resource allocation, which are useful skills to have!”
Macarthur-Stanham adds, “Reading and understanding a balance sheet or an income statement is similar to riding a bike in some respects; being a learned skill that just improves with time and experience. Financial statements are very much second nature to me after partaking in the simulation study.”
“Students provide better answers to employer interview questions when they have experienced similar situations before”
Scheule says the simulation study fosters skills students can use to impress future employers. “Often students provide better answers to employer interview questions when they have experienced similar situations before. And they can definitely use the simulation study as past examples,” he affirms.
Though the simulation study has been running since 2015, Scheule says this is the first year the assessment has reached its full potential – blending the best of online and face-to-face learning.
While all of the simulation and generated scenarios are online, the subject also includes many traditional teaching methods, like lectures (with occasional guest lecturers from the finance industry) tutorials on banking theories, written assessments, class-based and individual feedback sessions and a final written submission which includes a critical assessment on the students’ experience with the simulation.
Scheule says, “Most students come in and take banking with a view of investment banking. They think the exciting part is buying and trading shares, but then they realise that the other traditionally ‘boring’ tasks that banks do are also stimulating.”
And that, says Scheule, not only makes banking more interesting to students, but makes his students more interested in tackling the full breadth of what banking has to offer.