Business students at the University of Nebraska–Lincoln get to experience the competitive world of managing a bank before graduation without needing to leave campus. The Bank Management (FINA 465) course features simulation software which allows students to actively manage a bank and develop their strategic decision-making and analytical skills.

“In the simulation, students work in teams to run a bank in a highly competitive environment. Players choose their bank’s portfolio composition, loan and deposit pricing, credit risk exposure, and capital structure while complying with important regulatory restrictions,” said Donna Dudney, associate professor of finance, who teaches the course.

Every week, student teams work together to form strategic decisions surrounding their respective banks, all in competition with other groups to see who can achieve the highest ranking, based upon net income and increase in the market value of the stock. For Jac Clements, a senior accounting major from Elmwood, Nebraska, the simulation required his team to think critically about what direction to take their bank.

“My team had a mediocre start because of our initial decisions surrounding borrowing money. About halfway through, we discovered a more favorable strategy involving better interest rates, and were able to improve our performance. The simulation challenged my group and me to think through our problems creatively,” he said. “It was a great way for me to use my accounting skills in a hands-on way and apply everything I already knew."

The simulation breaks from the traditional lecture format to give students interested in finance a chance to learn about financial concepts in a hands-on approach. Dudney noted how the realistic nature of the simulation exposes students to the impact competition and economic conditions, such as inflation or changing interest rates, have on bank management decisions.

“A textbook or lecture can cover the types of decisions bank managers face, but the simulation provides a richer learning experience as students make these decisions in an environment that is much closer to a real-world experience,” she said. “By participating in the simulation, students see how asset and liability management tools can be used to improve performance and increase the value of a bank.”

The in-depth experience mirrored real-life banking through the impact of the decisions students made – something Joseph Carrigan, a senior actuarial science and finance major, enjoyed about the simulation. He shared how the simulation presented critical thinking opportunities, while also giving him a behind-the-scenes look at bank operations.

“Every decision has lasting and often irreversible consequences. The realism of the simulation prompted genuine retrospection that helped to learn the mechanics of banking,” said Carrigan, a Lake Mills, Wisconsin native. “I learned the basics of how a bank is truly managed, as opposed to simply how they make their money. I was involved in the full scope of a bank’s business decisions, which showed me how considerably proactive bank management actually is.”

The experience also benefits students as they enter careers in the financial sector. Khiana Blizek, ’21, a growth specialist at financial technology company Crescent, utilizes the skills sharpened in the course.

“The banking simulation required me to work with my team to put together a comprehensive strategy for our bank – whether we would focus on close relationship banking or high-volume banking, how much money to put behind marketing or how competitive to be with rates. These are all things I’ve brought to my company as we navigate this new crypto-powered fintech industry and think about our business strategy,” she explained.

Part of the banking and risk management option within the finance major, the course prepares students for positions of responsibility in the financial services industry and corporate risk management. With a focus on critical thinking, the simulation provides students with a major advantage in their future careers.

“The simulation helps students learn to think strategically and make decisions based on complex and often conflicting data. This skill will serve them well regardless of their career choice. If a student chooses to work in the banking industry, the simulation will help them have a more complete understanding of how banks operate and how they create value for their customers and owners,” Dudney said.

To learn more about the finance major, visit: https://business.unl.edu/financemajor.