Financial Engineering a Hot Topic at the University of Tulsa

By Tami Kamin-Meyer

Several years ago, when Tally Ferguson, senior vice president in charge of risk management at the Bank of Oklahoma (BOK) in Tulsa, decided his department needed to sharpen its use of mathematical theory when calculating risk, he knew whom to call: Dr. Roger Bey, chairman of the Department of Finance at the University of Tulsa. “They have the finance tools we need,” Tally said of the students enrolled in the Master of Science in Finance (MSF) program at UT that Bey oversees.

Ferguson got more than he bargained for from that phone call, and he couldn’t be happier. “I asked to see the curriculum, but Dr. Bey suggested we hire their students as interns,” said Ferguson. The way Ferguson saw it, the university had already done “the self-selection [of students], so we didn’t have to start from scratch” to search for qualified interns to join the BOK team.

According to Ferguson, the Bank of Oklahoma has employed seven interns in the Risk Management department and four in the bank’s Trust section. Of those 11, three have since been hired to work full-time with the bank, now that they’ve earned their degrees.

What is an MSF?

Several universities offer post-graduate degrees focusing on financial engineering, such as Kent State University in Ohio and the University of Oklahoma. However, said Bey, while those programs focus “exclusively” on financial engineering, Tulsa’s MSF concentrates on three peripheral topics relating to financial engineering: risk management, investment and portfolio management. “We’re not designed to send people to Wall Street. Our people go into major corporations to perform risk management functions,” he said.

Another major difference between Tulsa’s MSF and other financial engineering graduate degree offerings is that the UT program is housed in the College of Business. “Other schools tend to lump their programs in the engineering or math departments. Ours has more of a business emphasis,” said Bey.

If they wish, a student pursuing an MSF at the University of Tulsa can also earn an MBA at the same time. If they do, their curriculum is designed to prepare them for careers either in business or finance. According to Bey, the finance component of the degree provides students with “an in-depth understanding of finance” while the business aspects of the curriculum “exposes students to marketing.”

Taking a Turn at Interning

UT’s Master of Science in Finance features an internship component that Bey likened to an “immersion program.” While the MSF student is completing 36 semester hours of coursework towards their degree, they also intern part-time for two years. According to Bey, interns “get paid reasonably well and get half of their tuition paid by the companies” employing them.

Ferguson said the Bank of Oklahoma has been incredibly pleased with the interns they have hired from the MSF program. In fact, they have proven so vital to the success of the departments in which they are placed, Ferguson said, “If the pipeline [of interns] dries up, I’m in trouble.”

Hiring interns has saved the bank money since interns are not paid as much as full-time employees. The bank also saves money since it does not have to offer full-time employee benefits to interns. “If students weren’t taking the internships, I would have to hire two full-time workers [instead of the interns] who are more expensive and less qualified,” said Ferguson.

The Bank of Oklahoma is not the only company in Tulsa taking a turn at hiring interns. A Tulsa-based energy company, whose risk control manager requested that neither he nor his employer be identified in this article, is currently interviewing intern candidates from UT’s MSF program. “We’re a small company trying to elevate our level of sophistication in terms of risk evaluation. Both management and our investors want us to better understand that so we decided to add well-rounded, knowledgeable, finance-minded employees to our team,” he said.

Unique Offerings

Students studying for their MSF at the University of Tulsa do so in an environment that encourages the application of learned information on a constant basis. For example, the Williams Risk Management Center is a unique, state-of-the-art, computerized laboratory for experiential learning. The center is equipped with electronic stock ticker boards, 20 workstations, Bloomberg terminals and computer software designed to emulate life-like workplace challenges.

The Friends of Finance is a 400-plus member strong non-profit organization comprised of local business leaders who meet regularly to network or hear nationally known speakers. Past speakers have included the president, chairman or CEO of notable companies such as Wal-Mart, Bank of America and American Airlines. Sometimes the speakers meet with students from the MSF program, giving them a rare and unparalleled glimpse into the successful careers of prominent corporate executives.

The Big Deal about Financial Engineering

According to Bey, financial engineering is the fastest growing profession in the world of finance. Just a few short decades ago, Wall Street hired mathematicians, physicists and engineers to address the mathematical issues facing the financial world that financial analysts could not resolve, he said. In response to that demand, the academic community developed several programs that combined the mathematical skills needed to succeed on Wall Street with the economics and financial training required to calculate, understand and reduce risk.

“The driving force is that financial engineers are able to solve financial problems and create economic wealth,” said Bey. The various analyses performed by financial engineers allow financial advisors, who Bey described as “sales-type people working directly with clients” to do their jobs.

For further information on the University of Tulsa program, CLICK HERE

CLICK HERE to return to the Summary Article of this Special Report