In the multifaceted landscape of financial markets, the understanding and application of data science methods are crucial for achieving robustness, fairness, and strategic advancement. This dissertation addresses these critical areas through three interconnected studies. The first study investigates the problem of data imbalance, with particular emphasis on financial applications such as credit risk assessment, where the prevalence of non-defaulting entities overshadows defaulting ones. Traditional classification models often falter under such imbalances, leading to biased predictions. By analyzing linear discriminant functions under conditions where one class's sample size grows indefinitely while the other remains fixed, this study reveals that certain parameters stabilize, providing robust predictions. This robustness ensures model reliability even in skewed data environments. The second study explores anomalies in option pricing, specifically the total positivity of order 2 (TP₂) in call options and the reverse sign rule of order 2 (RR₂) in put options within the S&P 500 index. By examining the empirical significance and occurrence patterns of these violations, the research identifies potential trading opportunities. The findings demonstrate that while these conditions are mostly satisfied, violations can be strategically exploited for consistent positive returns, providing practical insights into profitable trading strategies. The third study addresses the fairness of regulatory stress tests, which are crucial for assessing the capital adequacy of banks. The uniform application of stress test models across diverse banks raises concerns about fairness and accuracy. This study proposes a method to aggregate individual models into a common framework, balancing forecast accuracy and equitable treatment. The research demonstrates that estimating and discarding centered bank fixed effects leads to more reliable and fair stress test outcomes. The conclusions of these studies highlight the importance of understanding the behavior of commonly used models in handling imbalanced data, the strategic exploitation of option pricing anomalies for profitable trading, and the need for fair regulatory practices to ensure financial stability. Together, these findings contribute to a deeper understanding of data science in finance, offering practical insights for regulators, financial institutions, and traders.

Yes / The relationship between banks and society in UK remains fragile more than 10 years after the financial crisis. The level of public mistrust, though lower than in the aftermath of the crisis, still re-mains at unsatisfactory levels especially as scandals continue to plague the sector. This raises the question of the effectiveness of reforms adopted in UK during the past 10 years to improve the public oversight of banks and change their culture. The reforms resulted in a significant expansion of the scope of financial regulation through the adoption of large numbers of new rules with binding effect on banks. In addition, new supervisory bodies were created to more closely monitor bank activities. This paper reviews the effects of the reforms on bank culture and concludes that expanded regulation and compulsory norms brought about mixed results and had only moderate effect on re-pairing the relationship between banks and UK society. The paper argues that more significant cultural change could come only from the banks themselves and therefore, going forward, the scope of compulsory norms should be reduced. The paper contributes to the ongoing dialogue between industry experts, policy makers and lawyers about the optimum levels of financial regulation especially in light of recent calls for rolling back parts of public interventions in the financial sector.

Tanzania is among the poorest countries in the world, with most of its population living in rural areas. Like most other developing countries, rural households' access to financial services is very limited. The government has adopted series of economic reform measures since mid-1980s that include financial liberalization. Liberalization of the financial sector facilitated participation of private financial institutions, restructuring of public financial institutions and privatization, elimination of interest rate controls, credit allocation and targeting. In addition, the role of the Bank of Tanzania in supervision and regulation of financial institutions was strengthened. Following the privatization of the financial sector, the number of financial service providers increased and diversified, which include commercial banks, development banks, insurance and social security funds, and capital markets. The role of the central bank was re-defined and strengthened in terms of price stability, supervision and regulation. Although there is an increase in financial sector service providers and products, rural households' access to financial services did not improve. To the contrary access to formal financial services is diminishing significantly, hence making poverty reduction initiatives more difficult. This study analyzed constraints to access to rural financial services, examined its impact on rural households' livelihoods, and recommended appropriate financial sector development strategies. The data for the study were collected from various sources - both primary and secondary. Primary data were collected from selected thirteen villages in Babati and government offices in the district through interviews, focus group discussions, questionnaire, and observation. Secondary information was gathered from documentary sources in the form of reports, records and review of literature. A combination of analytical tools was used - qualitative and quantitative. The study observed that history of rural finance in Tanzania is associated with colonialization of Tanganyika. The German colonial administration was the first to introduce establishment of modern commercial banking in the country in 1905 when the Deutsche Ostafrikanische bank opened a branch in Dar es Salaam. The British colonial administration, after the defeat of Germans in World War I, promoted establishment of commercial banks in Tanganyika in order to support commercialization of the economy. Consequently, German banks were replaced and commercial bank branches were established in other parts of the country. The independent government undertook massive re-organization of the financial sector and much attention was put on agricultural credit. Agricultural credit was organized through specialized agricultural credit organizations that corroborated with state owned commercial banks. However, the co-operative movement were assigned important role in credit administration on the ground as they are closer to the beneficiaries. The financial structure after independence up to the 1990s, when reforms were ushered in, is characterized by state owned financial institutions with pervasive interference. Credit was directed on the basis of the government priorities with little regard to credit worthiness analysis. The National Bank of Commerce (NBC) and Co-operative and Rural Development Bank (CRDB) were the dominant banks that implemented the government monetary policy. Emphasis was put on credit and savings mobilization was neglected. The CRDB operated mostly on managing donor funds meant for rural development. Liberalization of the financial sector was introduced through the Banking and Financial Institutions Act (BAFIA) of 1991 to address the weaknesses observed in the financial sector. It was envisaged to improve access to financial services through enhanced competition, increased and diversified financial products and providers, and improved integration of the financial system. However, assessment of the impact of the financial liberalization has mixed results. While there are distinct expansion in financial institutions, products and services; these are more concentrated in urban areas and accessed mostly by wealthy clients. Consequently, rural households' access to finance is diminishing. On the other hand, most financial institutions continue to employ traditional banking approaches - of insistence on collateral, preference for less risky category of clients, bias towards large loans, and bureaucratic procedures in providing loans. Besides, there are limited initiatives in product innovation, design of appropriate delivery mechanisms, and high interest rates spreads that discouraged potentials borrowers and depositors. As a result of poor access to financial services, most households have strengthened self-financing mechanisms through the informal arrangements. Although, the semi-formal - especially member based financial institutions and some Financial NGOs (FiNGOs) are attempting to correct the financial imbalances, their outreach, products and services are still limited. While there are improvement in supervision and regulation of the financial sector, it must be noted that prudential regulation and supervisions as part of the financial infrastructure if not carefully used, will undermine the efficiency of the financial market. The study concludes that rural households need a variety of financial products that include savings facilities, loans, insurance, leasing, and means of transfer payments. The degree of demand for these products is, however, determined by household's level of poverty, household size, level of education and skills, life cycle needs, and local market opportunities. However, financial sector reforms had little impact on households' livelihoods. Its implementation is associated with an increase in inequalities and poverty. Besides, there is a reduced funding as well as investment in agriculture, which forms the key sector of the economy. Consequently, the performance of the agricultural sector has been declining although its contribution to GDP is still significant. Assessing the supply and demand for rural financial services, it is concluded that rural areas are hardly served by banks hence limiting access to financial services. Prior to liberalization, government owned financial institutions provided limited financial services to rural areas organized through co-operatives and specialized credit agencies. CRDB was responsible for organization of credit for farm inputs, while NBC provided crop finance. In addition, CRDB also facilitated rural development programmes through donor funds. With the liberalization of the financial sector - co-operatives have collapsed, development banks are no longer active, and commercial banks have withdrawn from serving rural areas, thus creating a "supply gap" that is being replaced by informal finance. Furthermore, the study observed that demands for financial services is determined by age of the borrower, household size, and distance from a financial institution, the cost of borrowing that include loan transaction costs plus interest rate charged, bank procedures and conditions, policy and regulatory framework and institutional and infrastructural conditions. The study recommends the following: (i) Continued efforts for establishment of supportive macroeconomic and sectoral policies - financial, fiscal, monetary & rural development - and legal and regulatory framework that facilitates the growth of the rural financial markets, (ii) A facilitative intervention by the government in the development of the financial markets that addresses the national poverty reduction development objective through economic growth is required. The desired actions are those that focus on improvement in demand for financial services, reduced bureaucratic banking conditions, reduced transactions costs, improved infrastructure, and reduction of other structural bottlenecks limiting access to financial services, (iii) Development of appropriate financial institutions and products relevant for the rural sector requires government guidance through policy, development of appropriate financial infrastructure (legal, regulation and information), and incentive mechanisms. (iv) Intervention by the government in institutional and infrastructural development is required so as to facilitate the functioning of markets. There must be purposive investment strategy that supports development of the public infrastructure - such as transport and communication, electricity, security system, and research and development. Institutional development - judiciary machinery, credit bureaus, and property rights and business registry are required. Furthermore, training and capacity building so as to change peoples' mindsets concerning loans and savings mobilization, and (v) There is a need for building up a "New Role" for financial institutions. Financial institutions need to revisit their financial terms and conditions in favor of the development of RFMs, especially in terms of bank conditions, interest rate spreads, demand for collateral, and requirements for addressing the needs of the poor and rural population, Furthermore, financial institutions need to become more innovative in developing new products and services, improvement in organization of rural financial institutions, delivery mechanisms, and establishment of the institutional framework for integration of MFIs into the national financial system in the country. The following areas require further studies: (i) development of realistic rural development strategy that covers, among others, the development of the financial markets, (ii) institutionalization of the rural property ownership rights in order to establish how these can be used productively, through say mortgage, collateral, and/or sale for cash income, and (iii) Mechanisms for enforcement of loan repayments in rural areas - especially the lessons from informal operators. Experiences have shown that under informal credit arrangements, there are few default cases as opposed to formal commercial credit practices. / Development Studies / D. Litt. et Phil. (Development Studies)

To cope with constant changes in the economic environment, organizations continuously strive to implement appropriate business models that will contribute to increased productivity, reduced costs and a competitive advantage. Organisations need however to choose among different business models and select the option that offer the greatest potential to improve their service delivery, reducing costs and enable them to focus on their core business. This study conceptualized the shared services business model, by focusing on key factors, such as the rationale for implementing a shared services unit over other business models, establishing the processes followed by the banking industry with the implementation of a human capital shared services model, identifying the advantages versus disadvantages of the implementation of the model and to provide recommendations for the development and implementation of shared services models within specific organisational context. The researcher conducted mixed method research to address the research problem which incorporated both qualitative and quantitative research. In the study research was conducted in three phases. During the first phase exploratory research was conducted, consisting of desk study research and industry reports as well as surveys, periodicals and academic publications.During the second phase qualitative research was conducted, through semi-structured interviews. Findings from this research phase were used during the third phase, which was a quantitative study, whereby information gathered from the interviews informed the design of questionnaires. It is evident from the results that there were many similarities between the analyses of the interviews and questionnaires in relation to the literature review. Many commonalities amongst the three banks were identified during the implementation process and in many instances corroborated statements by key authors during the literature review. Both the interviews and analysis of the questionnaires confirmed cost savings, improved customer services and standardization as benefits of a shared services model. It was concluded that the implementation of a human capital shared services model within the banking sector in South Africa contribute positively to each of the banks used in the sample, both from a cost perspective as improvement of efficiencies. It was further concluded that the processes, systems and people involved in the implementation process are critical to successful implementation. Based on the information gathered the researcher recommends that a project team be appointed from inception to finalization of the implementation of a shared services model, which will be required to deal with the planning phase, feasibility study and the full implementation plan relating to the implementation of the model. In practice, this study will provide shared services managers with insights with regards to the implementation process to be followed for implementing a human capital shared services model. It can also provide valuable insight to management with regard to important or key factors to consider, ensuring the effective implementation of the model. Findings of this study may also be extended to other organizations in South Africa, considering the implementation of the shared services model. / Graduate School for Business Leadership / Thesis (M.B.A.)

The aim of this study was to explore human resources (HR) practitioners’ experiences of engagement interventions within a financial institution. A qualitative research approach was followed which was informed by the hermeneutic phenomenological paradigm. Semi-structured interviews were used. The findings indicated that HR practitioners play a critical role in enhancing engagement in organisations through the implementation of effective engagement interventions. The HR practitioners often thought of themselves as the ‘heart’, ‘the core’, ‘facilitator’, ‘business partner’ or ‘middle man’ when implementing engagement interventions. The majority of the HR practitioners did understand engagement, their role in the implementation of engagement interventions and the tools used to assess engagement. However, the findings did indicate that some of the HR practitioners within this study had limited knowledge of engagement, engagement interventions and the tools used to implement engagement. The findings also indicated that the implementation of an engagement intervention should be a collaborative process between employer and employee, with the support of top management to ensure the success of the engagement intervention. Engagement interventions were considered to be predominantly positive and successful by most of the participants. However, it was noted by participants that if there is no follow-through on the implementation of the engagement interventions it can become negative. / Industrial and Organisational Psychology / M. Com. (Industrial and Organisational Psychology)

Thesis (MComm (Statistics and Actuarial Science))--University of Stellenbosch, 2005. / Financial institutions invest in financial securities like equities, options and government bonds. Two measures, namely return and risk, are associated with each investment position. Return is a measure of the profit or loss of the investment, whilst risk is defined as the uncertainty about return. A financial institution that holds a portfolio of securities is exposed to different types of risk. The most well-known types are market, credit, liquidity, operational and legal risk. An institution has the need to quantify for each type of risk, the extent of its exposure. Currently, standard risk measures that aim to quantify risk only exist for market and credit risk. Extensive calculations are usually required to obtain values for risk measures. The investments positions that form the portfolio, as well as the market information that are used in the risk measure calculations, change during each trading day. Hence, the financial institution needs a business tool that has the ability to calculate various standard risk measures for dynamic market and position data at the end of each trading day. SAS Risk Dimensions is a software package that provides a solution to the calculation problem. A risk management system is created with this package and is used to calculate all the relevant risk measures on a daily basis. The purpose of this document is to explain and illustrate all the steps that should be followed to create a suitable risk management system with SAS Risk Dimensions.

Thesis (MDF)--University of Stellenbosch, 2011. / In the microfinance discourse, sustainability can relate to organisational, managerial and financial aspects. However, what is in vogue in mainstream analysis is the financial sustainability of MFIs throughout the world, especially in Africa, Asia and Latin America. What has attracted controversial debate on the self financial viability of MFIs is the extent they have maintained the balance between achieving substantial levels of profitability (through employing the institutionalist approach), and being agents of poverty-alleviation (through the welfarist approach). Analysing the mixed fortunes of the five MFIs in Mozambique between 2005 and 2009, this study explores the scope and patterns of outreach programmes as an essay in service-delivery by the MFIs, the repayment capacity of the different stripes of clients, the cost-control regime adopted by the MFIs and the ultimate variegated levels of success realised, and the challenges faced by the MFIs in different provinces.

Thesis (MDF)--Stellenbosch University, 2011. / Co-operative financial institutions (CFIs) as a concept has been in existence in South Africa for a number of years either as credit unions, “stokvels”, savings and credit co-operatives and/or FSC‟s. As a result, regulators have long realized the need and potential of the CFI concept, with an exemption notice promulgated in 1994 and the Co-operative Bank specific legislation in 2007, allowing institutions modeled around a common bond to take deposits within certain conditions, to ensure the safety and soundness of such institutions and to facilitate financial inclusion. The study provides an overview of the regulatory and supervisory frameworks for CFIs in South Africa, noting the roles of various regulatory stakeholders as well as the perceptions of the regulated institutions. The study finds that despite the small size relative to the overall economy, and the low penetration rates, the CFI sector in South Africa is providing financial services to marginalized communities. However, capacity is a major constraint in the development and growth of the sector. As a result, any supervisory interventions will be pointless in the absence of appropriate capacity interventions. Despite the existence of various regulators, regulatory and supervisory oversight is considered weak. There is lack of clarity on the various roles of the different regulators within the sector, raising scope for regulatory arbitrage. In addition, the role of the representative body has been called into question, with some CFIs querying its relevance. Regulations have been put in place to address some of these anomalies, and these were evaluated in the context of recommending appropriate supervisory frameworks to enhance the safety and soundness of the sector and minimize regulatory arbitrage. The recommendations are also aligned to the nature and size of such institutions within the broader national strategy of promoting access to financial services in a safe and sound manner.

Thesis (MBA)--Stellenbosch University, 2014. / Research on strategy has been focusing at organisational level, mostly on practices such as strategic planning, strategy workshops and consultancy practices. With the emergence of strategy-as-practice, the focus has been redirected to explore beneath organisational-level processes and bring to the fore the role that people play in the practice of strategy. This research project looked at the practice of strategy within the Namibia Financial Institutions Supervisory Authority (NAMFISA), the financial regulator in Namibia. Strategy is seen within this research project as something that is ‘done’ by actors who are referred to as ‘practitioners’ of strategy. Strategy-as-practice research is a relatively new field of strategy research. This assignment has aimed to add to the fast growing body of knowledge in the strategy-as-practice research field and it forms part of a collaborative between the University of Stellenbosch Business School (USB) and The Narrative Lab. The researcher explored how strategy is practised within NAMFISA, as the case study company. The assignment points out the strategy actors, the practices and processes they follow as well as the tools they use to plan and execute the NAMFISA strategy. The researcher took an activity-based view and paid special attention to practitioners, practices and praxis (Jarzabkowski, 2005) involved in strategising as well as the manner in which NAMFISA ‘does’ strategy. The system aspects of Biomatrix theory, namely environment, ethos, aims, processes, structure, governance and matter, energy and information (Mei), as described by Dostal, Cloete and Járos (2005), were also integrated into the research wherever they were deemed to affect the practice of strategy at NAMFISA. The above-mentioned aspects, in conjunction with the elements of the activity-based view and the strategising matrix (Jarzabkowski, 2005), shaped the basis for the analysis which was done using the ATLAS.ti tool. After the first analysis, a second analysis was performed using SenseMakerTM Explorer, another qualitative analysis tool which helped in gaining an in-depth understanding of the findings obtained using the ATLAS.ti tool. During the second analysis exercise, the respondents were requested to self-index their own narratives about the strategy activities at NAMFISA. Practices were found to be dominated by planning and discussions and praxis occurred predominantly at the meso level within NAMFISA. As the practice of strategy is entrenched, procedural strategising was found to be the most dominant of the strategising matrix, followed by interactive. No element of preactive strategising was observed. Planning was done by the executive and middle managers, mostly at annual strategic retreats. The use of external consultants was minimal. The research concluded with recommendations for further studies on strategy-as-practice research in Southern Africa.

Thesis (MComm)--Stellenbosch University, 2005. / ENGLISH ABSTRACT: South Africans earning less than Rl 440 per month (18 million adults) and less than R2 880 per month (29 million adults) are regarded as poor and relatively poor respectively. Of the relatively poor, 78% are unbanked, i.e. do not have access to a formal bank account, while 86% of the poor are unbanked. These figures show clearly that commercial banks do not meet the financial needs of many people, especially the poor for savings, credit, transmission and insurance services. Therefore the importance of those institutions that do not form part of the formal financial sector and provide micro savings and micro credit services, generally referred to as micro finance, to the poor at the local level on a sustainable basis. The objective of this research is twofold. Firstly, a review of the literature on micro finance in general to establish the financial needs of the poor, the constraints formal financial institutions face in providing micro financial services and to identify best practice regarding the provision of financial services to the poor in order to be in the position to form an opinion on institutional success. Secondly, to analyse a specific South African micro finance initiative, Financial Services Cooperatives (FSCs), to identify how FSCs relate to the international best practice and to establish whether they are successful in addressing the financial needs of the poor. A FSC is a financial institution through which micro finance services (savings, credit, transmission and insurance) are extended to unbanked households in a rural village. It utilises a community's rules, customs, relationships, knowledge, solidarity and resources combined with formal financial methods and concepts. The FSC is initiated, owned, financed and managed by the villagers themselves. FSCs are registered cooperatives under the Cooperative Act of 1981 and may accept deposits from their members in terms of an exemption from the Bank Act of 1990. Currently, FSCs experience problems in providing credit, transmission and insurance services, preventing them from intermediating between borrowers and savers. After reviewing the above-mentioned international best practice the conclusion reached with regard to FSCs includes the following: FSCs only provide savings services and therefore do not intermediate between borrowers and savers as required for a financial institution. This in tum prevents them from being sustainable. FSCs' failure can be ascribed to the restrictive legislation, unsuccessful regulation and supervision. New legislation is currently under review that will change the landscape for micro finance and specifically for FSCs. / AFRIKAANSE OPSOMMING: Suid-Afrikaners wat minder as Rl 440 per maand (18 miljoen volwassenes) en minder as R2 880 per maand verdien (29 miljoen volwassenes) word onderskeidelik as arm and relatief arm bestempel. Agt-en-sewentig persent van dié wat relatief arm is, het nie toegang tot 'n formele bankrekening nie, terwyl 86% van dié wat arm is, geen toegang het nie. Hierdie syfers toon duidelik dat kommersiële banke nie aan die finansiële behoeftes, met betrekking tot spaar-, krediet-, transmissie- en versekeringsdienste van baie mense voldoen nie, veral nie die armes nie. Daarom dat instellings wat nie deel vorm van die formele finansiële sektor nie en mikrobesparings en mikro-krediet, algemeen bekend as mikro-finansies, in 'n plaaslike gebied en op 'n volhoubare basis verleen, belangrik is. Die doel van hierdie navorsing is tweeledig: Eerstens, bied dit 'n oorsig oor die mikro-finansiering literatuur ten einde die finansiële behoeftes van die armes te ondersoek en die beperkings wat formele finansiële instellings ondervind om mikro-finansiële dienste te verskaf, aan te stip. Beste praktyk rakende die voorsiening van finansiële dienste aan die armes word geïdentifiseer, om sodoende in 'n posisie te wees om 'n opinie te kan vorm oor institusionele suksesfaktore. Tweedens, om a spesifieke Suid-Afrikaanse mikro-finansiële inisiatief, Finanical Services Cooperatives (FSCs) te ondersoek, ten einde vas te stel hoe hierdie inisiatief vergelyk met internasionale beste praktyk en hoe suksesvol dit is in die voorsiening van finansiële dienste aan die armes. 'n FSC is 'n finansiële instelling waardeur mikro-finansiële dienste (spaar-, krediet-, transmissie- en versekeringsdienste) verskaf word aan diegene in 'n plattelandse nedersetting wat nie toegang tot formele bankdienste het me. FSCs maak gebruik van 'n gemeenskap se reëls, gebruike, verhoudings, kennis, solidariteit en hulpbronne en kombineer dit met formele finansiële metodes en konsepte. Dit is 'n inisiatief van die gemeenskap en word deur die inwoners van die nedersetting besit, finansier en bestuur. FSCs is geregistreerde koëperasies in terme van die Ko-operatiewe Wet van 1981, en mag ook deposito's van hulle lede aanvaar op grand van 'n vrystelling van die Bankwet van 1990. Tans ondervind FSCs probleme in die verskaffing van krediet-, transmissieen versekeringsdienste wat hulle verhoed om as tussenganger tussen leners en spaarders op te tree. Na die oorweging van die internasionale beste-praktyk, kan die volgende gevolgtrekking rakende FSCs gemaak word: FSCs tree nie op as tussenganger tussen leners en spaarders nie, soos vereis word van 'n finansiële instelling nie. Dit beperk gevolglik volhoubaarheid. Die mislukking kan toegeskryf word aan beperkte wetgewing, onsuksesvolle regulering en supervisie. Nuwe wetgewing is tans onder oorweging wat die landskap vir mikro finansiering en veral vir FSCs sal verander.