Finance

Managing risk with machine learning?

The crisis caused by Covid-19 has brought opportunities as well as devastation. Companies operating in a few industries (e.g. retail, pharmaceutical, and technology) are prospering while in some other sectors (e.g. aviation and travel) are suffering most. With the stimulus from the government and central bank, businesses are trying to accumulate higher debt. On the other hand, banks are cautious to offer additional credit, especially to many small businesses. Assessing their credit risk is of utmost importance. Because of cheap storage of huge amounts of data and easy access to computing power, millions of data items can be analyzed instantly. Can machine learning be an attractive tool for bankers and institutional  investors to evaluate their loans and investments? What is the potential of digital technology for financial risk management?

Bio:
Prof. Marisetty is currently working as a full professor of finance at the University of Hyderabad in India. Earlier he spent around 20 years in Australia as faculty at Monash University and RMIT University. He researches and teaches financial analytics and fintech. He has received several international research grants and published extensively in international journals. 

Can machine learning help us manage risk?

The crisis caused by Covid-19 has brought both opportunities and setbacks companies operating in the retail, pharmaceutical and tech industries are prospering, while those in aviation and travel sectors are suffering most. The stimulus from government and the central bank is causing businesses to accumulate higher debt while at the same time banks are cautious to offer additional credit, especially to many small businesses. A proper assessment of applicants’ credit risk is of the utmost importance. Thanks to cheap storage of huge amounts of data and easy access to computing power, millions of data items can be analysed instantly. Is machine learning an attractive tool that bankers and institutional investors could use to evaluate their loans and investments? What is the potential of digital technology for financial risk management?

Bio:
Rezaul Kabir is the Chair Professor in Corporate Finance and Risk Management and the Head of the Department of Finance and Accounting. He is also an Honorary Visiting Professor at the Faculty of Economics and Management, University Putra Malaysia; and a member of the Audit Committee at the Healthcare Institute Netherlands.

Prof. Kabir received his PhD degree in Finance from the University of Maastricht (the Netherlands), and Master degrees in Business Administration and Economics from the University of Leuven (Belgium) and the University of Dhaka (Bangladesh). Earlier, he worked at the universities in Stirling (United Kingdom), Tilburg and Maastricht (Netherlands) and Antwerp (Belgium). He was also a visiting professor / scholar at University of Liege (Belgium); New York University (United States); Central University of Finance and Economics, Beijing (China); and University of Melbourne (Australia). Prior to the start of the university career, he worked at Fisons Bangladesh Limited (a British pharmaceutical company), and was a trainee at the Industrial Bank of Bangladesh, Dhaka; and the European Commission, Brussels.

Prof. Kabir has lectured extensively undergraduate, graduate and executive level courses. His research has been primarily multi-disciplinary, empirical and policy-oriented. He has studied a wide range of issues related to business organizations (e.g. corporate finance, corporate governance, corporate diversification, corporate social responsibility, business groups, insider trading, trading suspensions, stock market crash, financial crisis, executive pay, earnings announcements, financial derivatives and risk management). He has widely published in national and international books, reports and scientific journals (Journal of Banking and Finance, Journal of Corporate Finance, Journal of Business Finance and Accounting, European Economic Review, Strategic Management Journal, Journal of Business Research, Journal of Multinational Financial Management, Journal of Economics and Business, Applied Financial Economics, Research in International Business and Finance, Pacific Accounting Review, Journal of International Financial Markets, Institutions & Money, and China Journal of Accounting Research). He belongs to the top 10% of authors on Social Science Research Network (SSRN) by all-time downloads.

Prof. Kabir has travelled worldwide to present papers and give talks at international academic conferences and universities. He has supervised several hundreds BSc and MSc thesis research students and 11 PhD thesis research students. He also worked on several research projects funded by governmental and private agencies. He has been a mentor of young academics from many different countries: Bangladesh, Czech Republic, China, India, Indonesia, Malaysia, the Netherlands, Pakistan, and Vietnam.

The impact of Covid-19 on my personal business is considerably, it took a while before a new contract was signed. During the period without contract, the expenses continued. In the branches were I deliver my services, seems hardly hit. It’s mostly business as usual in Insurance and banking. Although they face reduced activities and thus sales.

Bio:
I’m a business analyst on the edge between Finance and IT. I’m able to make the translation of business requirement to the underlying bits and bites. I’ve a sharp eye for the missing piece of the puzzle. Connected to Risk Management through my role as treasurer at Genootschap voor Risico Management. On a personal note, I like outdoor sports like soccer, skiing, swimming and mountain biking.

Working in the financial sector is primarily about taking social responsibility, at least that's what I hope. That is why I found it especially fascinating, in addition to my own process of getting used to it, to see what happened with companies and organizations, but especially with the people behind them. Despite the fact that the impact is high for everyone, I am also impressed by the enormous resilience of many to 'mitigate the risks' as we say in the jargon. What inventiveness was and is there in this day and age to keep our heads above something, to adapt, to take a step back if necessary. I am less hopeful about the psychological impact, especially with young people and vulnerable elderly people. That requires a different resilience and we seem to have few solutions for it. 

Bio:
Martin Moree has worked in the financial sector for more than 30 years in various positions that have always been related to risk management. Most of the time this was credit risk management, one of the core functions of banks. In recent years the focus has been on operational risk management. It is precisely the credit crisis that has taught us that operational risk management has an important function within banking control.

In addition to the day-to-day risk management processes, the main focus has been on developing and implementing a well-functioning risk and control framework within the organisation. This is not an easy task, especially within the more complex matrix organisations that banks usually are, especially if we take into account the constant changes and challenges that the financial sector is facing. A fascinating profession!

Training manager Finance & Accounting with the portfolio Operations. Other activities:

• Performance of consultancy in the field of valuation of companies and organisations.
• Recent assignments: transfer of industrial injection moulding
• Appreciation of a physiotherapy on behalf of an acceding partner
• Valuation of a traffic consultancy firm for the purpose of the sale of the shares
• Cash-flow determination of an undertaking for the purpose of establishing alimony

Covid-19 is having a major impact on society. As an insurance provider, our organisation’s immediate actions were focused on ensuring the safety of our employees and the continuity of our operational management. Employees began working from home straight away, whilst still providing customers with our full range of services.

As a financial service provider, we are constantly making preparations for Covid-19 and other pandemics, developing new products and updating existing ones to offer customers added value in both personal and business situations.

Bio:
Monique Abbink (1962) has worked for the financial service provider Nationale Nederlanden since 2018, as the Operational Risk Manager for non-life products. Before taking on that role, she worked as a quality manager and held a variety of positions at the intersection of IT and business, including working as a Project Manager and Consultant for Delta Lloyd and Ohra insurance companies and communications firm KPN.

The crisis took us by surprise, and the initial phase disrupted our work. But we sorted everything out within a few days, or at the most two weeks, and we found that working from home was many times more efficient and cost-effective than working in the office. That said, we are still in a kind of emergency mode: not yet able to come together to explore the other ways we could be surprised and the things we can do to prepare for those surprises.

Bio:
My name is Ingrid van het Hof and I am a first-line risk manager in Insurance and Pensions. I started working in insurance in 2002 and joined Rabobank in 2006. After spending six years in customer service roles, in 2012 I started working in the central organisation.

Freelancers form part of an organisation’s temporary workforce. When the economic landscape becomes rocky, the temporary staff are the first to go; freelance contracts are often costly, and the organisation opts for early termination. As a freelancer myself, I plan for such an eventuality and make sure I have a financial reserve. At the start of the current crisis I started the Master’s degree programme in Risk Management. I wanted to put all that unexpected free time to good use and come back stronger once the recovery takes hold.

Bio:
Roel Vermelis (1975): After I graduated in Business Economics, I started working as a freelancer in the field of internal control, risk management and auditing. I work with clients in diverse sectors, from banking and insurance to energy, construction and infrastructure, healthcare and government.

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