Stellenbosch undergrads given real life masterclass on avoiding financial crashes

Johannesburg-based technology consultancy Elenjical Solution’s fintech expert Robert Cronje delivered a lecture to undergraduates and masters’ students on the ‘Application of Value-at-Risk: Methods and Practice’ at his old university, Stellenbosch.

The lecture had two parts: an introduction to the concepts of value-at-risk and its three core challenges of efficiency, accuracy and aggregation, followed by a closer look at how technology is becoming more effective at evaluating risk in even the most complex financial products. In the latter section, he focused on the technologies and tools developed worldwide in response to previous economic crises.

An understanding vital in avoiding future financial crises

He described how Value-at-Risk technology, such as the Murex platform, has grown in importance and sophistication since the Financial Crisis: not only can it make sense of thousands of diverse data points, but it now covers capital market trading accounting, back-office and risk areas together. This type of tech is also scalable and modular, letting clients implement it in a way that fits their needs and software, which lowers the risk of future financial crises. Robert gave a deeper technical explanation of these attributes, walking the audience through various calculations and scenario generations.

The lecture gave a real-world understanding of evaluating complex financial risks, showing how the theory students learn plays out in practice. Robert broke down how Value-at-Risk is used to evaluate what a firm stands to lose over a given time period at a given probability, and why that figure matters: he covered its useful features, why it’s needed, and its limitations, keeping a balanced view of a complex risk metric.

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