The African Institute of Financial Markets and Risk Management (AIFMRM), a postgraduate institute in the Faculty of Commerce at the University of Cape Town (UCT), hosted two pioneering events in July – the much anticipated fifth edition of the annual Financial Mathematics Team Challenge, and a new, intensive research collaboration called, The Factory. Both events are designed to boost the culture of research in the university by nurturing a new generation of scholars.
“We consider research to be the vehicle for everything that we do,” says Professor David Taylor, Director of AIFMRM.
AIFMRM is a postgraduate teaching and research facility that drives investigation through inviting debate, discussion and collaboration on industry-relevant issues. In so doing, it aspires to develop the next generation of African academics dedicated to rigorous, finance-related research.
“There is a skills shortage in the financial industry, and of course Bachelors graduates get scooped up after graduation as they are a rare resource. However, this means that talented students may not continue their studies. Taking a long-term view, if we lose potential Master’s and PhD students, then ultimately who will be the researchers and lecturers of the future?” asks Dr Andrea Macrina, Director of the Financial Mathematics Programme at University College London (UCL) and Adjunct Associate Professor in AIFMRM.
AIFMRM endeavours to nurture this precious chain of educators and foster South African intellectual capital by exposing students to the value of research through experience.
The institute has pioneered two initiatives to engage talented, hard-working students in research. The first of these is the annual Financial Mathematics Team Challenge (FMTC), jointly hosted by AIFMRM and UCL, and co-created by Professor Taylor and Dr Macrina.
During the FMTC, teams of postgraduate students have seven days to solve problems posed by either academics or industry practitioners. Each problem has mathematical, computational and theoretical components, and includes analysis of real-world data. Teams are made up of local and international students at Master’s and PhD level. According to Dr Macrina, this mix is exceptionally beneficial because it removes prejudice and assumption, and leads to genuine collaboration based on respect, contribution and peer-learning.
Now in its fifth iteration, the FMTC has borne great success and achieves a high level of output from the students. “The work achieved in this time frame is equivalent to a Master’s dissertation, and many of the challenges have gone on to inspire research publications,” says Professor Taylor. He adds that “not once has a team failed to solve their problem.” This year, three of UCT’s Quantitative Finance PhD graduates were previous FMTC participants. “We have witnessed the depth of their development,” says Dr Macrina, “and this speaks to the deeper challenge of transformation – home-grown academics are integral to the development and transformation of South Africa.”
A testament to the FMTC’s success is that it will be replicated in Brazil in August this year. AIFMRM has been exploring how to apply this blueprint elsewhere for some time. A previous participant of the challenge, a Brazilian PhD graduate from UCL, was so inspired by the effect of the FMTC on young South Africans that he leapt at the chance to do the same in Brazil. A delegation from UCT and UCL will be travelling to Rio to serve as mentors.
The success of the FMTC motivated the second of AIFMRM’s research initiatives. The Factory, piloted in Cape Town from the 2nd to the 13th of July, is an innovative research exercise during which teams work intensively over 10 days to produce academic articles of a standard that can be submitted for publication in leading, peer-reviewed scientific journals.
“As far as I know, this is the first time a project like this has been attempted. There is nothing quite like it elsewhere,” says Dr Macrina. He adds, “I thrive on collaboration.”
The Factory first assembled and then supported teams of researchers, which included a mix of local and international participants across various stages of their careers, to collaborate on a paper, thus facilitating the transmission of skills and creating lasting networks across the scientific community.
Dr Macrina explains that a passion for research and genuine curiosity is what binds the teams. “They have been collaborating across the globe via Skype and email for the last six months and are meeting at The Factory to complete a draft of their paper.”
The Factory brought in an expert reviewer to help both teams improve the quality of their work during the process and thereby increase their chances of publication. Dr Marc Henrard, Head of Quantitative Research at OpenGamma and visiting professor at UCL, provided two rounds of expert scrutiny and feedback to the teams.
Completing an academic paper in such a short time frame is a Herculean task. When asked how participants fared under such intense conditions, Dr Macrina laughs and says, “Well, we bought a very nice coffee machine beforehand.” Both he and Professor Taylor have high hopes for the process and look forward to seeing the final papers in print.