The Importance of Risk Analysis Education in K12 Schools
Posted March 19, 2023 by Joshua neubert
March has been a whirlwind of news about the financial sector with at least five banks failing or heading in that direction. As we learn more about what happened with Silicon Valley Bank (SVB), the insights into how the 16th largest bank in the US failed highlight the importance of risk management and the need for better risk management education. This article from the Global Association of Risk Professionals, https://www.garp.org/risk-intelligence/market/silicon-valley-bank-031423, dives into some of the ways that SVB failed to have adequate risk management and mitigation strategies. These critical functions for business aren’t traditionally taught in schools; however, as industries become more complex, perhaps they should be.
Schools and teachers are constantly looking for better ways to demonstrate the “real world” connection for mathematical concepts. Well, it couldn’t get more real than this. How do you model the likelihood that customers will withdraw $42 Billion in deposits in a single day? How do you know how much money to have in reserve for such “longtail” risk outcomes? This is where the job of the actuary and financial risk managers come into play. Statistics, probability, and mathematical modeling are key skills in managing these very real risks and are transferrable to just about any industry.
Getting students to understand at an early age the importance of mathematical risk analysis could be a critical piece to the stability of future markets. As industries become more complex, risk analysis is an increasingly important skill for students to understand, but it is still given very little emphasis in schools. Risks are everywhere, but math can provide the solution to mitigate and manage these problems. Today, most K12 teachers don’t know where to begin in teaching these risk management skills because it hasn’t been a focus of their training. This is where we have to look outside of the traditional curriculum. The Modeling the Future Challenge from The Actuarial Foundation provides an excellent opportunity for students and teachers to learn more and to make that “real world” connection for their mathematics or computer science classroom. Here are a few important resources that may be helpful for students and teachers alike to help get started with mathematical risk analysis:
MTFC Resource Library: For student resources to help learn more about risk analysis and how to compete in the MTFC, check out the Modeling the Future Challenge’s Resource Library: https://www.mtfchallenge.org/resources/
Student Scholarships: The Actuarial Foundation Foundation offers additional scholarship programs for students interested in these areas. Information can be found here: https://actuarialfoundation.org/scholarships/
Teacher Training: For teachers wanting to learn how they can incorporate this into their classrooms, the Modeling the Future Challenge provides a paid professional development training course. Check it out here: https://www.mtfchallenge.org/educator-training-program/
On Campus MTFC Student Workshops: University partners across the country are offering on campus workshops in the fall for high school students to learn more about risk management and actuarial science. Schools can get travel grants from the Actuarial Foundation to cover the costs of bringing a class to the local workshop. Check out how here: https://www.mtfchallenge.org/news/on-campus/
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