Banking Simulation - Inspiration

Many of us grew up in the 1970s playing hobby board games with friends. Our basements and family rooms often became battlegrounds, filled with the energy of intense games like PIT and Haggle. We still remember the chaos—how we’d gather around the table, shuffling cards, setting our sights on victory. PIT was a favorite. It wasn’t a complicated game; we were just trading cards, trying to corner the market on wheat, barley, or corn. But the real excitement came from the frantic calls of “Two! Two! I’ll trade two!” as everyone scrambled to make deals. It was all about speed, reading people, and thinking fast. It felt like a miniature stock exchange right in our home and taught us more about negotiation than we realized at the time.

Haggle was the opposite—a quieter, more cerebral game. Sid Sackson’s creation was about what you didn’t know as much as what you did. With secret rules and colored cards, you had to piece together the puzzle through negotiation, trading not just cards but information. Sharing too much could be as dangerous as knowing too little. We’d huddle in corners, whispering deals, trying to outmaneuver one another without revealing our hands. Every round felt like a new adventure.

Looking back, we realize how much those games shaped the way we thought about negotiation and strategy. The fast-paced bartering of PIT and the secretive maneuvering in Haggle were more than fun—they were training grounds. They planted seeds for ideas about trading, risk, and strategy that influenced more serious endeavors later on. Those nights weren’t just about winning; they were about learning the art of the deal in the most entertaining way possible.

In the mid-90's while our company president, Brad Olson, was working to earn his MBA from Johns Hopkins University, one unforgettable experience stood out in his economics lab—a unique simulation called "Captains of Industry." This event brought together students from economics and finance classes for a three-hour deep dive into the cutthroat world of 19th-century business tycoons.

In that memorable session, the room transformed into a bustling marketplace of budding railroad magnates, bankers, and suppliers. Each student took on a distinct role: some started with inherited land or resources, while others relied on their wits and work ethic. The goal was clear: build wealth by constructing railroads or engaging in shrewd deals and negotiations—skills that soon proved to be the true heart of the game.

Negotiation quickly became the name of the game, with alliances forged and broken in mere minutes. Students had to think on their feet, balancing their ambitions with the limited resources available, such as steel, coal, and iron ore. Instructors added to the challenge by randomly distributing "land grants" to mimic the unpredictable twists of real-world economics.

While the session didn’t include any formal reports or analyses, the energy in the room and the intensity of the negotiations spoke for themselves. Though it only lasted three hours, the "Captains of Industry" simulation remains a vivid memory for those who took part. It wasn’t just a game—it was a lesson in the power of negotiation, strategy, and sometimes, a bit of luck.

In 2002, we had the opportunity to take part in the "Interactive Techniques For Learning" seminar led by Sivasailam Thiagarajan, or "Thiagi," along with several of his team members. This seminar was an eye-opening experience into the world of instructional games and simulations, showing how engaging activities can lead to deep and effective learning.

Thiagi emphasized that effective learning is about more than just having fun; it requires carefully designed activities that align with learning objectives. We explored various techniques for creating motivating learning environments, choosing the right activities, debriefing effectively, and evaluating learning outcomes. The seminar highlighted the importance of balancing training, facilitation, and facilitative training to maximize the impact of these activities.

One standout technique was the "Trading Card Simulations," which use simple playing cards to model real-world dynamics like cooperation, competition, and negotiation. This approach provided a powerful way to engage participants in strategic thinking and decision-making, showing how flexible and adaptable games can be in different learning contexts.

Reflecting on this experience, it was clear that active engagement and structured debriefing are key to meaningful learning. The seminar reinforced the value of using well-designed interactive techniques to foster a deeper understanding and practical application of concepts. Attending this seminar was a transformative experience that reshaped our approach to education and training, inspiring us to create more impactful and engaging learning sessions.

In the early 2000s, the foundational concepts from "The Balancing ACcT Game" began to reshape the landscape of our bank simulations. As we sought more effective ways to teach banking principles, the straightforward mechanics and clear educational objectives of "The Balancing ACcT Game" provided valuable insights. This simple yet powerful game, designed to teach the basics of accounting and financial management, became a catalyst for innovation in our more advanced banking simulations.

The game excelled at teaching the core accounting equation—Assets = Liabilities + Owner's Equity—through hands-on gameplay. Players managed a corporation’s financial health by engaging in various transactions such as buying inventory, issuing stock, and taking on mortgages. These mechanics allowed players to see the immediate impact of their decisions on the financial statements, offering a tangible understanding of abstract concepts.

Our simulation designed were inspired by this approach.  Future versions of our bank simulations introduced phases where participants managed smaller-scale financial institutions and focused on fundamental financial decisions. This shift allowed participants to develop a stronger grasp of basic concepts before advancing to more complex scenarios involving risk management, capital adequacy, and regulatory compliance.

Our future versions of bank simulations adopted a dynamic, transaction-based approach to learning, directly influenced by "The Balancing ACcT Game." (and also the CSBS Interactive Market Simulation.)  The simulation's decisions became less macro in nature. Participants were able to see the how single balance sheet volume transactions impacted balance sheet dynamics. This set the stage for more strategic thinking by grounding participants in essential accounting and financial management principles.

After mastering the fundamentals, participants progressed to more complex scenarios in the Strategic Growth Phase. They were tasked with making strategic decisions involving asset allocation, liability management, and risk assessment—core components in our more advanced simulations. The foundation built in the initial phase allowed them to better understand the consequences of their decisions, ultimately leading to more meaningful engagement with the simulation's advanced elements.

By integrating these foundational concepts, our bank simulations became more accessible and engaging for participants, particularly those new to the field. Educators noticed improved comprehension and retention rates, as participants could better understand how high-level financial strategies impacted a bank’s balance sheet and income statement. This approach also fostered a deeper understanding of key metrics such as liquidity, profitability, and capital adequacy.

"The Balancing ACcT Game" emphasized real-time feedback, allowing players to immediately see the results of their decisions on their financial position. Our bank simulations adopted a similar approach by incorporating real-time feedback mechanisms. Participants received immediate updates on their financial status, helping them learn from their mistakes and successes quickly. This iterative learning process encouraged participants to experiment with different strategies and understand the nuanced dynamics of bank management.

Incorporating the concepts from "The Balancing ACcT Game" into our bank simulations marked a significant shift in financial education. By bridging the gap between foundational accounting concepts and advanced financial strategies, these simulations provided a more holistic learning experience. The result was a new generation of bank simulations that were not only more effective in teaching complex financial management but also more engaging and accessible for learners at all levels.