ECONOMIC VALUE	ECONOMICS	PROFITABILITY ANALYSIS
GAP MANAGEMENT	SECURITIES	OFF-BALANCE-SHEET RISK
REGULATORY ISSUES	MARKETING	STRATEGIES & PLANNING
SPREAD MANAGEMENT	RISK ASSESSMENT	NEW MARKETS & COMPETITION

Since 1964, the SBG computer models have been continuously tested and refined to improve their value as educational tools for the banking industry.   Bankers realize they can no longer just use industry standards as the measure of their performance, or as the primary basis for strategic financial decisions.  SBG is combined with the BanRisk courseware for this distant learning e-mail version of the program.  EuroBanRisk is the International version of the course offered by the European Bank Training Network <www.ebtn.com>  or <www.eurolearning.com/elportal/main.jsp?id_site=53&language=UK> under the direction of the Warsaw Bankers Association.

The BanRisk III Course Description

	PROGRAM OVERVIEW
	WHO SHOULD ENROLL
	WHY THE SELF STUDY WORKS
	COST

PROGRAM OVERVIEW

BanRisk is a complete educational program in commercial bank management that combines extensive courseware and a computer simulation. The computer model is used by more than 100 academic and banking institutions.

BanRisk includes comprehensive courseware specifically designed for distant learning self study programs. The courseware covers all aspects of the program including methodologies for analyzing the computer reports and economic and financial information for managing all of the various areas of the bank.

The course is roughly equivalent to an MBA level class.   HRW has over thirty years of experience offering bank simulation courses and more than 20,000 bankers have completed our programs. Although BanRisk evolved as a one week seminar, it is now used primarily in distant learning formats because this approach offers enormous cost benefits without sacrificing learning objectives.

In the program, participants work in five/six member management teams, operating multibillion dollar commercial banks. They decide upon key operating factors such as lending and funding rates, service charge structures, credit quality, security sales and purchases, marketing and staff allocations, gap management, off-balance-sheet activities, and capital issues. The simulation evaluates the teams’ decisions in the context of real-world competitive and economic conditions and regulatory constraints.

Each computer report is a new financial statement of condition that also includes extensive financial data on the competitor banks. The challenge in BanRisk is to continually improve the earnings of the bank compared to the competition without increasing risks. These issues are measured by a complex stock pricing feature in the computer model. Teams compete for the best stock price at the end of the program.  By actually managing a bank, participants learn how all the major functions of a bank interact under various competitive and economic conditions.

A team can be in any location as they only need to e-mail a single two page decision form.  The results for all the teams are processed and the computer output is returned by e-mail to each team member ( or whoever has e-mail capability).  At the conclusion of the program, members of the team with the best performance (i.e., the highest stock price at the end of the game) are awarded winners’ plaques.

WHO SHOULD ENROLL

Participants do not need a financial background for the program; HRW educational materials are written in modules that are sequenced appropriately for individuals with widely different levels of sophistication and experience. Historically, about 35% of the participants in BanRisk come from non banking areas such as marketing or systems.   Mainly, participants need to be able to meet the time and study requirements of the course. The overall performance of the simulated bank depends upon the contributions of everyone on the team.

Approximately 3 weeks prior to the start of the course, participants receive digital copies of the course materials and administrative details that include the list of due dates for the decisions which are usually at two week intervals. Everyone completes a detailed pre-study package to prepare for the start of the simulation. The amount of pre-study time participants need depends upon background and experience. Those with little banking experience or financial expertise may need as much as 40 hours of preparation time. By contrast, experienced bankers will need about 20 hours. Preparing properly for the simulation is the hardest part of the course.

The workload in the course is idealized for 5/6 participants per team. It is better to start with six members as it is not unusual for a team to loose a member over the 22 weeks. You can have a larger number of participants but there will not be very much for them to do and this will have an impact on what everyone learns. In any simulation you learn by doing.

Once the simulation part of the course starts, participants typically meet on a bi-weekly basis with their team to make the bank’s management decisions. Teams can usually make their management decisions in less than two hours. There are nine decisions during the simulation at two week intervals.   The team meets at the convenience of its members. Courses can be run at a weekly decision pace if all participants agree.

WHY THE SELF STUDY WORKS

BanRisk III, like any complex bank simulation course, presents participants with hard financial information that they must evaluate and assimilate. The educational support materials are clear and well-organized.

The BanRisk educational materials include a thorough introduction to banking basics and to the computer simulation, analytical exercises for participants to use during the program to assess the data generated by the computer model, and educational readings to provide participants with banking concepts that they can apply and evaluate through the simulation. (click here    to see an overview and detailed annotated review of the course materials).  Many participants claim they put in close to 100 hours over the twenty two weeks of the typical BanRisk distant learning course.

COST

There is a one time licensing fee of $1000.00 US for any organization that needs the software for the Stanford Bank Game.  A web version of SBG will be available in 2008 and a license is not required if the web version of the game is used.

Participant fee.  There is a commercial per person fee of $250 for use of the software that includes copy releases of student materials.  Discounts may be available to some non-profit organizations.

If you are interested in turn key programs or need assistance with finding instructors please contact HRW.