Skip to main content

BankRush: Retail Banking Serious Game

Via: IndustryMastersBank Rush – The Bank Business Simulation

The IndustryMasters Team announced early June that their new business simulation game
Bank Rush has become available on-line.

Developed by Tycoon Systems, Bank Rush is a serious game for people who want to better understand the banking sector. This very realistic banking game puts players in the role of the CEO of a major retail bank, to compete against each other for market leadership and shareholder value.

Background Scenario

The financial crisis began in 2007 with the loss of confidence by investors in the value of securitized mortgages in the United States.

In September 2008, the crisis deepened! Stock markets worldwide crashed and entered a period of high volatility, and a considerable number of banks, mortgage lenders and insurance companies failed in the following months.

In February 2009 U.S. President Barack Obama signed the $787 billion American Recovery and Reinvestment Act into law.

The Federal Reserve announced that it will purchase $1.15 trillion in US Assets to prop up liquidity and lending to spur economic growth.

Now it's your mission to manage the Bank through the crisis! You will adjust your interest rates for loans and deposits, adjust the marketing budgets and invest into new market segments. To expand your business you can borrow fresh money from the Central Bank at low interest rates! But caution: there might still be some surprises in the balance sheet and loan defaults may destroy your profits.

Competitive Environment

The Bank is operating in direct competition with 4 other banks. Your task, as the new CEO, is to intensify the competition and grow your bank in a sustainable way.

Your Bank operates in the retail sector and provides services for private individuals such as Current Accounts, Saving Accounts, Credit Cards and long term Loans & Mortgages.

You compete against 4 virtual competitors that have different products and strategies. The US Accounts Bank and the UK Bank are the strongest competitors and try to outgrow each other. Two other competitors, the Global Trust bank and the Euro Bank Group are heavily hit by the financial crisis.

By operating checking accounts and long term deposits you get capital into the bank that you can lend out to other customers as loans.

It is essential that you try to lend out loans as expensive as possible (high interest rate) while refinancing the money as cheap as possible (low interest rate) to get the best result.

Setting the Interest Rates

Whenever the Central Bank changes the interest rates (Fed Rate), the whole market moves with it. To help you making the right settings, you will get warning messages if your interest rates deviate strongly from the market's average. In any case you should frequently check your competitors’ rates and make sure your rates fit the market.

Expansion & Marketing

To grow your interest income you need to give out more loans to new and existing clients.

And for a high profitability you need to make sure that the workload of your managers reaches close to 100%.

To raise the workload you can get new customers by investing more into marketing. Once the workload is high, you can lower the marketing budgets to a sustainable level.

If you expand your current products or invest into a new one, the workload start low and you need to invest substantially into marketing to get enough new customers to bring up workload and profits.

Sources of Funding

Treasury is the 'heart' of your Bank where the overall funding and cash allocations are made and the bank balance sheet gets shaped.

Ideally, funds lent to clients should balance with funds borrowed from clients. In practice, this is not likely to happen and there are two additional sources of funds: the Central Bank and the Interbanking Market.

The Economy shows 4 important indicators on a monthly base, looking 12 month back: the Change of the GDP (Gross Domestic Product), the annual Inflation Rate, the Jobless Rate and the Fed Rate. Until March 2009 the macro-economic scenario is modeled with real US economy data.The Fed Rate has a direct impact on the re-financing cost of the Banks and should be watched closely. At start of the simulation (January 2008) the Fed Rate gets lowered to 3% and continues to move downwards until it reaches the all time low of 0.25% in December 2008.

About Tycoon Systems

Tycoon Systems is a software company focusing on the development and marketing of business education technology.

15 years ago, their founder Thomas Lehnert has developed his first business simulation CABS, with the vision of providing an experience-based learning environment for business education. From this vision, Thomas and his team have created IndustryPlayer and IndustryMasters, used by many thousands of business students across the globe.

Both IndustryPlayer and IndustryMasters are based on an interactive real-time multi-player technology. Like in the real economy, the participants are competing against each other in industries which evolve dynamically, depending on the decisions of all players. In real-time, the participant see the impact of their decisions to the bottom line.