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HERE YOU CAN READ SUPPLEMENTAL
INFORMATION ON
It was clear 30 years ago that a simulated model of a bank had educational value to experienced bankers as well as students trying to learn the fundamental financial dynamics of banking. Alex Robichek, a Chaired Banking Professor at Stanford University, was the first to exploit this new educational technology. His vision is the foundation of what we do today. Human Resources West has licensed SBG to over 100 universities and banking schools. Simply put, bank simulations are powerful educational tools for teaching and learning about commercial bank management. In much the same way that a realistic flight simulator benefits experienced pilots more than novice pilots, SBG benefits experienced bankers more than novices. But also like flight simulation programs, novices can learn a great deal more than they could with a more traditional classroom approach. Simulation-based learning is more effective than traditional forms of education. Participants retain what they have learned longer because the simulation is closer to real experience. In addition, although the participants need several decision periods to become familiar with their simulated bank and the educational materials, the simulation compresses complex and multiple experiences into an abbreviated time period. As participants grasp the intricacies of managing the simulated bank, they begin to understand through their experience the current issues and problems of bank profitability. The computer program is the real instructor as it gives the participants immediate and precise feedback each quarter on the effects of their decisions. Although a complex computer model can, at one level, be a very valuable educational exercise, at another level it may only be a very exciting game. The distinction between these is often blurred - especially for participants in a simulation. Even though participants are almost always enthusiastic and typically have a lot of fun, they don't necessarily realize the full educational value offered by the simulation without expert guidance. In our experience, how much participants learn is largely a question of how much the simulation experience is structured educationally. The features of the computer model and how they work also has some effect on what can be done educationally. Perhaps the one single aspect of SBG that distinguishes it from other bank simulations is the richness of the interactions. As a consequence, the game is more realistic for experienced bankers, but it is also more difficult to use effectively. In a bank simulation, participants first need to be taught how to go about managing all the different areas of the bank, such as securities, liabilities, loans, capital, and how to integrate all of these to maximize overall profitability. Participants also need specific directions and guidance on how to convert the raw information from the computer reports into the type of information required for quality managerial decisions. When this is accomplished quickly, teams truly begin to manage their simulated bank and then they begin to learn about the critical strategic management issues in banking today. Historically, our focus at HRW has been banking education for personnel at larger institutions. By and large these people know a great deal about one small area of the bank, are in significant jobs or starting careers, but are usually confused about the big picture. What the various areas of the bank do, and how it all fits together is often a mystery to even experienced bankers. Starting with the Stanford Bank Game Version 8 a number of years ago, we have redesigned and updated the computer models and our courseware with this audience as the primary objective. More recently, firms that must work closely with banks have found our programs provide their personnel with the information they need to be more effective. SBG AND THE BANRISK
COURSE SBG is a richly featured computer model and can be used in multiple ways to achieve educational objectives at different levels. BanRisk combines SBG with our course materials and it is available to commercial clients, third party vendors, and academic institutions. There are two versions - a US and a generic International. The
basic computer models are the same, we just use different terminology. Apart from
the terminology, there are only minor differences between the student materials for the US
and International versions. As a result of the course, participants better understand The BanRisk courseware - separate from the computer model - is designed to guarantee participants realize the educational benefits that SBG offers. This course content evolved over an almost 20 year period of doing in-house seminars for personnel at large banks such as J.P. Morgan, First Chicago, Bank of America, First Interstate, Bank of Boston, and many others. In a bank simulation, participants need to be taught how to go about managing all the different areas of the bank, such as securities, liabilities, loans, capital, and how to integrate all of these to maximize overall profitability. Participants also need specific directions and guidance on how to convert the raw information from the computer reports into the type of information required for quality managerial decisions. BanRisk educational materials cover all aspects of the simulation: team organization, definition of individual responsibilities, steps in the decision process, instructions for analyzing the computer reports, as well as comprehensive general information on all areas of bank management. At the outset of BanRisk each team member is working with different course material. In this way the group rapidly acquires the expertise needed to properly manage their simulated bank. The computer report of the starting position of the bank is a case study of a commercial bank. BanRisk pre-course study materials provide a step-by-step detailed analysis of this starting position for participants so that they understand the condition of the bank, know how to get started in the program, and begin to grasp the fundamentals of bank analysis. The first set of management decisions results in the participants' solutions to the case study. In turn, the next computer report, in the form of a bank financial statement, is both an evaluation of the participants' decisions and a whole new case study. The new problems are products of the previous decisions and participants are challenged to find ways to improve their performance. BanRisk Case Studies provide participants with the analytical tools and methodology to understand and solve the problems they encounter managing their banks. The BanRisk Readings, akin to complementary lectures, supply the more general concepts, background, and theories participants need to apply during the simulation. Fortunately, the "game" dynamics of the computer simulation are such, that the distant learning approach coupled with the HRW BanRisk course materials, provides for a very high quality graduate level course in commercial bank management. The competitive game aspects of the simulation is a powerful motivator for individuals and team development. Participants work much harder as a member of a competitive team than they do on their own. Everyone wants to win the game and groups typically work harder toward the end of the course than at the outset. You can see a brief courseware overview with a more detailed
annotated review of either BanRisk US Version The reiterative cyclical nature of the simulation (study, analysis, decision) is ideal for structuring the program in a wide variety of presentation formats. How to present the course is largely a question of cost and participant requirements. BanRisk course materials are designed for distant or self instructional uses as this offers the best trade off for most audiences. Putting participants into a classroom environment is prohibitively expensive as the per day cost of salary is typically 5 times the cost of the education. Highly qualified instructors add value - no question. Is the value added worth the additional real cost of putting 25 to 30 participants in an off the job classroom? You be the judge. The BanRisk course combined with the simulation is content rich; the additional study time in distant learning formats benefits some more than a live instructor in a more intense seminar setting. Do you need our course materials? The short answer is no - but you should then have a very experienced instructor. Participants in any of the bank simulation models available on the market today love the experience. They always learn something about banking and the models are in fact great games. We all love a good game, and in much the same way that computer flight simulators are popular as games, so too are bank simulations. But we really do not think you learn how to fly (or manage a bank) this way, and trial and error education is very time intensive. Participants in a bank simulation are going to spend a lot of time "playing" the game and quality guidance will produce a much better learning experience for the time invested. If you are still not convinced, think of it this way - our computer model and educational program is designed based on what participants tell us they need to learn to be better in their jobs.
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the importance of integrating
strategic decisions
how the economy and the
competition affect financial strategies
how the regulatory environment
affects management decisions and imposes constraints on the bank
make decisions that are good for
the whole bank, not just their area
plan concretely, based on
analysis of market opportunities and risks
appreciate the importance of
complying with operating guidelines
provide more informed and
useful data to management
make decisions under
competitive pressure
work in groups to reach stated
goals. 
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