CIA (e)Bulletin/(e)Bulletin de l'ICA
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January 2017
 
 

Actuaries in Banking

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By Chris Fievoli, FCIA

International Actuarial Association (IAA) members gathered in Cape Town, South Africa last November for their latest council and committee meetings. After each meeting, the (e)Bulletin looks at a specific topic from the event to provide CIA members insight into some of the discussions taking place.

Given the venue of this past meeting, it seems appropriate to focus on what is happening internationally with actuaries in banking. The South African actuarial profession has seen significant success breaking into the banking sector, with close to 300 actuaries and students employed there. Similarly, Australia lists about the same number of members with banking as a practice area. Both countries have banking education qualification for actuaries either in place or in development, with South Africa having established a new fellowship track. The United Kingdom is also in the process of developing more formalized education in this sector. Other countries—Canada included—have yet to see the same level of involvement and development.

IAA Banking Working Group

In order to facilitate greater achievements in this area, the IAA has established a Banking Working Group, chaired by South African Michael Tichareva. Their first in-person meeting took place in Cape Town. CIA member Erik von Schilling serves as Vice-chair of the working group and CIA member Fei Xie also sits as a member. Going forward, the group will focus on the following areas:

  • Identifying the roles that actuaries are playing in banking organizations;
  • Creating a forum to encourage communication for actuaries working in the sector;
  • Providing leadership in terms of defining and developing actuarial practice; and
  • Providing support to member associations interested in developing banking practices.

The first meeting of the working group was followed by a one-day banking seminar sponsored by the South African Actuarial Society banking group.

Although experiences differ by jurisdiction, there is general support for the idea that actuaries have a skill set that can be useful in a banking environment. Although established standards do not yet exist, actuaries can readily apply their skills in financial risk management, data mining and analytics, and stress testing. Those actuaries who do work in banking typically get involved with credit management (both retail and commercial), treasury asset liability management, liquidity and capital management, customer segmentation, and capital/enterprise stress testing.

Are You an Actuary Working in Banking?

We would like to hear from any CIA members who currently work or have worked in banking, so that we can know who you are and better build the network of Canadian actuaries in this sector. If you or anyone you know fits this description, we encourage you to contact Erik von Schilling.

The next set of IAA meetings will take place in Budapest, Hungary in April 2017. We will provide a recap of those meetings, focusing on a different area of interest, in a future issue of the (e)Bulletin.

Chris Fievoli, FCIA, is staff actuary, communications and public affairs, at the CIA Head Office.

 

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