Learning to make a business case
More than 120 students from 23 top universities around the world gathered at the Shanghai Advanced Institute of Finance for a simulated business competition themed “artificial intelligence plus capital markets” between Jan 20 and 22.
The competition, part of the 2019 International Youth Leadership Finance Summit, was to provide a platform for interaction and learning for undergraduate students, and enhance their understanding of financial academics and practice. This was achieved by presenting business cases and inviting leaders from the financial industry and academics to encourage dialogue and provide coaching, according to SAIF.
The finalists were required to select an enterprise from any industry, including e-commerce, education, big-data application, smart agriculture and medicine, devise a solution to empower the business with an AI application and present a business plan to win “finance” from the judges who are actual investors in industry.
Yang Lin, head of the Master of Finance program at SAIF, says that such competitions have been held at the school — which was set up at Shanghai Jiao Tong University in 2009 — for the past six years, but earlier competition topics, such as monetary policy, used to be more macro and more focused on students’ presentation and organizational skills.
Now things have changed, she says, adding: “Finance is increasingly penetrating every aspect of life, and therefore the topic must be linked to real business. Also, the judges are no longer only university professors.”
Yang also says that one of Shanghai’s major projects is to launch a science and technology innovation board on the Shanghai Stock Exchange and an experimental registration-based system for initial pub- lic offerings, and the theme of this year’s competition echoed this.
“The main purpose of this board will be to attract technology enterprises, especially highly innovative ones, to Shanghai and provide them with a large amount of capital, foster cutting-edge technology, and then transfer this technology to other regions at home and abroad to consolidate Shanghai’s status as a financial center,” she says.
The theme also considered students’ job preferences, according to SAIF, which took the 10th place in a global ranking of financial master’s degree programs released in June by Financial Times. The program retained its No 1 ranking in Asia.
Five students from Xi’an Jiaotong University won the top prize in the competition and shared a monetary award of 10,000 yuan ($1,485).
Students from Shanghai Jiao Tong University, Xi’an Jiaotong University, Peking University, McGill University in Canada and the London School of Economics and Political Science won in separate industry categories.
Yootha Tiki Yong, a second-year student at LSE, says it was her second time at the event.
The economics major, who’s working as an intern in a fintech bank, says the AI theme was attractive.
“Also, it was great to meet with people from different countries and backgrounds, such as computer science, engineering, physics, and we could see what people said from different perspectives rather than just finance,” says Yong.
Her team chose Babylon Health, a UK-based company specializing in the medical industry, for their project.
Yong says they used AI in natural language processing where a patient talks to the machine and it feeds the information back to a database so the machine learns and talks to the patients.
“I think there’s so much potential profit in the project and there is a shortage of doctors and a need for more healthcare in China. Some people, even now, don’t have adequate access to healthcare,” she says.
The team from McGill University chose Cargill, a US-based grain company that recently opened its office in China, to use AI to increase soybean production.
Speaking about the choice of Cargill, John Wu, 22, a fifth-year computer engineering major at the university, says: “One of China’s aims is to modernize its agricultural sector. From my personal perspective, I have many family members in China who are farmers.”
Another member from the McGill team, Pentcho Tchomakov, says that they did research on what other countries had done with AI to help alleviate the problems in agriculture, and tried to use several technologies by combining them.
Tchomakov explains: “People in China use a lot of tablets and smartphones, so we thought that if we had a user-friendly app for farmers, it could help them make decisions based on actual statistics.”
For soybean production, he says, there are several factors, including how deep farmers sow the seeds, how much water they use, and how much rain or sun the crop needs. Therefore, sensors have to be placed in the soil to measure this.
“The system, after evaluating the weather forecast, can tell farmers which seed to use and how deep to sow the seeds,” Tchomakov says.
Also, with drones, crops can be monitored for signs of drought or disease before human eyes can see them, the team says.
“Typically, a farmer checks the leaves for signs of trouble, but the leaves in the middle of the field may not look the same as the ones on the edges of the plot, but when you have a view from above, you get the whole picture,” says Tchomakov.
The contestants say they learned a lot from the judges in terms of how to present their business plans to win investment.
Wang Yining, a contestant from the Antai College of Economics and Management of Shanghai Jiao Tong University, says: “They told us that we need to look at the presentation more from the investors’ perspective. What finally made them decide whether to invest was not only the product, but also how much they could profit from the investment.”
Hu Jie, one of the judges and a professor of practice at SAIF, says that for the students from the engineering and technology backgrounds, they need to pay more attention to convey a sense of business in their presentations.
“Some contestants focused on explaining their advanced technology but it was like talking to investors as if they were scientists. Investors care about whether this is going to be a good business project and generate a return on investment,” says Hu, who was also a former chairman and CEO of Xunlei BigData and Xunlei Finance.