AIFMRM student wins prestigious competition

A student from the African Institute of Financial Markets and Risk Management (AIFMRM) at the University of Cape Town has won an elite FNB DataQuest competition – where data science was applied in a banking industry environment.

For Rachel Swallow, entering the FNB DataQuest competition was all about an opportunity to practise what she had just learnt in class the week before. She never thought she stood a chance at winning, which allowed her to have some fun with the challenge without feeling any pressure.

“I loved the competition,” says the 23-year-old, currently studying towards an MSc specialising in Data Science (Financial Markets stream). This interdisciplinary degree is offered in collaboration with the departments of Statistical Sciences, Computer Science and Information Systems, but is administered and convened by the Department of Statistical Sciences. “It was so interactive and brilliantly set up with breakout rooms and smaller groups as well as lecturers on hand for any question we might have.”

The competition was part of a four-day event held from 17 to 20 May 2021, combining masterclasses, lectures and the competition. Over 200 participants could select to take part in one of three challenges. These included Money Management, Collections and Ongoing Risk Management. Rachel says she chose the latter because it seemed the most interesting and she had just learnt about it. The task required her to identify the customers, using the dataset provided, who are less likely to default on loan repayments and find a way of ensuring the probability of default of the population is less than 10%. Participants had to come up with a solution and pitch it to a panel of judges.

“The Institute is very proud of Rachel’s achievement,” says AIFMRM’s Director, Professor David Taylor. “The FNB DataQuest event is an excellent space to push boundaries and find unique solutions. It is really useful to those interested in a career in data analytics and combines an engaging competition with wonderful learning and networking situations.”

Participants had four days of lectures as well as online meetings with other teammates and fellow students. Lectures included presentations by industry leaders on topics like the future of analytics, design thinking, data visualisation and analytics and the financial context. Coaching sessions, as well as one-on-one meetings with experts and team members, were encouraged, allowing participants to “meet” others in industry and other universities.

“It was really cool,” says Rachel. “Even though it was a virtual event, everything went so well and the talks were fascinating. In class, we don’t always get to see how theory is applied and used. The sessions were very interactive, and we got to engage with others on a personal level.”

The competition changed Rachel’s prospects too, and she has subsequently signed on for the FirstRand quant programme in 2022. Even though she used to think she would go into medical technology – as a type-1 diabetic, she experienced first-hand the benefit of technology and how apps could improve people’s lives. This led to her undergraduate degree in Mechatronic Engineering. The competition, however, opened her eyes to the options posed by the financial data science world. “It is a bit different, but here too, I can see how data science can help people make more informed decisions.”

Rachel says, “AIFMRM is a fantastic institution. I can’t recommend it highly enough. I did not come from a financial background but the class, the lecturers, and all the resources and support provided are excellent. Everyone is invested in your success, from giving you interview skills to making sure you can pitch well at presentations. It all goes into a very well-rounded professional.”

For producing the winner, AIFMRM and the Faculty of Science split R50 000. Rachel, as the winner, received R25 000 – which the future financial expert is prudently saving.

MCom team wins trading simulation – again

A student team from the African Institute of Financial Markets and Risk Management (AIFMRM) at the University of Cape Town again won the FNB Securities Challenge in 2020. The MCom students competed head-to-head with Wits and Stellenbosch teams in a trading simulation using a live FNB Securities trading simulator. They had a hypothetical US$100 000 in real-time foreign exchange and global stock markets, with the goal of achieving the highest return over three months.

AIFMRM’s Dr Abhik Mukherjee said, “We are delighted that the AIFMRM team has now won twice in a row, but the emphasis has to be on the process. The competition allows them to follow the financial press and to observe in a relatively tangible way the immediate impact of their decisions. The simulation challenges students’ assumptions, making it an exceptional learning experience.”

FNB Portfolio Manager and Stockbroker Richard Levesque agreed. “The 2020 intervarsity trading competition was certainly the most challenging one to date, as the COVID-19 pandemic severely impacted the global economy. Global market volatility spiked considerably, which presented teams with an abundance of opportunity. Under very difficult conditions, the teams did incredibly well. And congratulations to the AIFMRM team on winning.”

Team member Calum Murphy said that the team had been very confident in their ability to develop a strategy that would result in superior performance. “It also proved to be an education in appreciating risk in a time of crisis as it coincided with the downturn in global markets as oil prices crashed and coronavirus was declared a pandemic.

For Tlotliso Jonas, preparing for the competition took the form of plenty of additional studying and learning about online trading. “I am shy and generally not good at interacting with people, but it helped me make some improvements to my interpersonal skills such as communication.”

Michael Brakspear said the competition had been a lot of fun as well. “It made me experience some true emotional highs and lows, so I can only imagine how exhilarating it would be to do it professionally with real money at stake. I can definitely see myself taking a further interest in trading and targeting it as a career choice.”

Each winning team member won R4 000 worth of FirstRand shares in an FNB Securities account – with their very own local JSE stock broking account.

The shift to online learning

AIFMRM acted swiftly in response to the outbreak of COVID-19 and the subsequent lockdowns of sectors of the economy at the end of March 2020. Acting Director of AIFMRM in 2020, Obeid Mahomed, said it helped that AIFMRM identified a difference between emergency remote teaching (ERT) and online teaching (where more time to plan and resources were available).

“In addition to the time pressure, we also had to work with UCT’s directive of ‘low-tech’ ERT to ensure that students with limited access to data were still able to participate effectively. We alleviated some of this pressure by purchasing mobile data for students and opening access on the learning platform, Vula,” said Mahomed. We assisted some students in areas of poor internet coverage in relocating to Cape Town.

In addition, each lecturer developed their innovative teaching style, basically creating bespoke content. The next issue was interaction. Synchronous or real-time interaction for all programmes was not possible as this would have been too data-intensive and hi-tech. Group work and collaboration amongst the students was encouraged as much as possible.

Across the board, feedback from students showed that they were surprised and impressed by how they were able to continue studying in 2020. They particularly mentioned the assistance given by lecturers as well as the psycho-social support provided by Billy Enderstein. She was available 24/7, on email as well as mobile, to check in with students and offer advice. “For many students, the experience was gruelling at first and more difficult than with face-to-face classrooms,” she said. “I also posted a lot of supportive information about online learning. Students especially needed guidance on pacing themselves as the intensity of online can be overwhelming.”

It has also been instrumental in AIFMRM’s preparations for the 2021 academic year, again in a virtual format. “Our experience, innovations and resources from emergency remote teaching during 2020 enabled us to evolve our online teaching solutions and interventions,” explains Mohamed.

Many students are also better prepared in 2021 as they experienced emergency remote teaching during 2020 in their undergraduate degrees. “They understand the requisite technology, are aware of potential adversities and overall are more resilient,” says Mahomed. “Our improved online learning solutions combined with recalibrated student expectations resulted in a successful start to the new academic year.”

Q&A with Dr Alex Backwell, AIFMRM Senior Lecturer

Dr Alex Backwell has been with AIFMRM since its inception in 2014 – first as a student and now as a senior lecturer and researcher. His career has grown as the institute has developed into a world-class centre for research and scholarship – giving him plenty of scope for international collaboration and cutting-edge research.

You have been with AIFMRM since its launch in 2014?

Yes, indeed. Back then, it was much smaller and still very much in its infancy in terms of scope and vision. Interestingly, if I had been at UCT one year earlier, I would not have been able to do the MPhil specialising in Mathematical Finance. I was among the first intake of students on the programme, and it was primarily due to the energy and passion of AIFMRM founder Professor David Taylor that I wanted to stay. Over the years, the institute has grown in stature and recognition with key relationships in industry and a vibrant research community that I am excited to be a part of.

What is your current role at AIFMRM?

I am a Senior Lecturer. I teach on both our degrees, the MPhil in Mathematical Finance and the MCom in Risk Management of Financial Markets, the former being the very programme that I took about seven years ago! My other priority, in addition to teaching, is academic research. My research focus is on the interest-rate markets, especially the modelling of interest rates and their volatility.

Could you perhaps expand a bit on your particular field of interest and research?

Certainly. My PhD thesis was about the mathematical modelling of interest rates and particularly the modelling of interest-rate volatility, that is, the potential variation of interest rates. At the moment, for instance, volatility is high in most financial markets, due to COVID-19 and the turbulence it has created. The interest-rate markets have been greatly affected, because of greater demand for simpler and lower-risk investments. The ultimate aim of interest-rate and other financial modelling is to understand and manage the risk associated with developments to the market and economy, both expected and unexpected. One of the potential new research areas I am interested in, in addition to continuing my PhD work is around a publication in the Journal of Finance by Luigi Zingales from the University of Chicago on Does Finance Benefit Society? This type of work has interesting implications, I think, especially in our emerging market context. Another area I’m working on is the replacement of LIBOR (the London Interbank Offered Rate) as the central benchmark interest rate.

You describe yourself as an academic at heart. What does this mean to you?

I suppose it boils down to being primarily interested in ideas and concepts. That is not to say that I am not concerned with how theory plays out in practice, or that practical and applied matters are not important, but I enjoy abstract thinking and building and expanding on current models of thought and academic theories.

Have the COVID-19 lockdown restrictions affected your way of working?

Not very much. As long as my internet connection is working, I can teach online and interact with other researchers and publications to discuss all aspects of my work. Connecting with other researchers often happens online anyway, as many are based in countries all around the world. Working remotely, i.e. from home, requires perhaps a bit of discipline and structure and I try to keep to a daytime routine.

What do you do when you are not working or teaching?

I have always been very interested in sports, particularly rugby, cricket and various martial arts. I loved playing rugby at high school, but in more recent years I have hugely enjoyed training and competing in jiu jitsu, a grappling/wrestling martial art and sport. I hold a purple belt and teach the beginners’ classes at my academy. There are interesting correlations between the pursuits of mathematics and jiu jitsu. In both cases, you have to accept some confusion and frustration and learn to persist until things become clearer.

Tell us a bit about your background?

I grew up in Johannesburg with my father, who has a background in accounting, tax and banking, and my mother who is a teacher. I went to school at St Stithians. I moved to Cape Town to study actuarial science and while I love the Mother City, I enjoy visiting Johannesburg and would say that I appreciate both cities for what each has to offer.

Q&A with Mansa Aidoo, AIFMRM’s new lecturer

Qualified quantitative analyst Mansa Aidoo dreamed of a career in academia. When an opportunity presented itself at her alma mater, the African Institute of Financial Markets and Risk Management (AIFMRM), she knew it was the right move for her.

You did the MCom in Risk Management of Financial Markets at the institute two years ago. How does it feel to be back?

Honestly, it’s great. I always wanted to work in the academic world, but I thought of going into industry first, making contacts and connections and gaining practical experience. I worked at Nedbank as a graduate quantitative analyst for a year and the experience was very rewarding. But when I thought about what I wanted to achieve and which direction my career should take, it was always academia that beckoned.

What in particular attracts you to the academic world?

I think it is the pursuit of knowledge and research coupled with interacting with students and making abstract theory simple to understand. Many students are struggling with complex fields of study, and I know what it is like because I went through all of this myself. I also helped tutor and counsel students when I was on campus and I understand the pressures many of them are under, especially those from underprivileged backgrounds. I would love to help more students, especially black students, excel in the various fields of finance.

Is there a particular message you have for students who are struggling?

Keep going, persevere and stay strong. There are many people to talk to at the university, and they will all tell you to keep going. I learnt that struggling is normal, and even failing at times is not the end of the world. But you must not let it define you. If there is a particular subject or field of study that troubles you, find someone to talk to or pursue some of the many online tools available. There is so much help for students, and often they only need to be made aware of the various channels. If you are still battling, decide if there is another way to achieve the outcome that you desire – or if you should be doing something else. The important thing is you have to keep learning and growing.

Tell us a bit about yourself, where you grew up and the journey that brought you to the AIFMRM.

I grew up in the Eastern Cape, in Mthatha. My mother died when I was very young, but I was surrounded by my three sisters, my father and later, my stepmother, so there was always a lot of support and guidance growing up. I enjoyed school and from a young age worked hard. My favourite subject was mathematics and I came to UCT to study actuarial science. However, I ended up switching to finance because it was more in line with where I envisioned myself at the time. By the time I did the MCom in Risk Management, I knew I had found the direction I wanted to pursue in my career.

You say you learned much about success from your family. Can you tell us more about that?

My father taught me about perseverance. He was a senior superintendent for the municipality’s electrical department, and his philosophy was that if one door closes, another always opens. I have carried this lesson with me, and it has helped me many times in life.

Do you have a specific field of interest in terms of research?

I am currently looking into a topic for my PhD thesis, possibly in the area of credit risk, which I think is very interesting from an African perspective and especially now. I believe the financial sector has an important role to play in the development of local economies, particularly as we rebuild the economy in the post-COVID-19 world. The financial sector will be able to contribute in valuable ways. Additionally, I am interested in how financial inclusivity and access to finance can be improved and I hope to contribute to the body of work in this area with new research of my own.