AQFC2015

Background

Financial Engineering (FE) is a multidisciplinary field involving economics and financial theory, and applying engineering methodologies and quantitative methods (including mathematics, statistics, computation and the practice of programming) to finance. It is closely related to other fields such as Mathematical Finance, Quantitative Finance, and Econometrics. However, compared to those fields, FE emphasises on "engineering" financial investment and risk management solutions. It is normally used in the securities, banking, and financial management and consulting industries, or by quantitative analysts in corporate treasury and finance departments of general manufacturing and service firms.

Over the past 20 years, FE and the related quantitative finance areas have been rapidly developed, in both research and education, in some of the best universities around the world. In US, there are strong FE groups in engineering schools at top universities such as Princeton, Columbia, Cornell and UC Berkeley. In Europe, research and education in related fields flourish in Berlin, London, Paris and Zurich (each city has several strong groups). Almost all the aforementioned groups are running extremely popular MSc programmes that train future industrial leaders and generate substantial incomes for further strategic development of the host departments/faculties.  

An interesting observation is that almost all these aforementioned groups are geographically close to major financial centres. Hong Kong is not an exception. Faculty of Engineering at CUHK, especially the Department of Systems Engineering and Engineering Management (SEEM), is the pioneer in introducing FE into its curriculum in Hong Kong (in 1997). There is a strong research group at SEEM, whose members have been contributing to the FE direction by utilizing their diverse domain expertise in operations research, optimization, control theory, stochastic analysis and data mining. There is also broad interest across the Faculty in the relevant areas, such as data analytics, network economics, or areas that underpin the core techniques in FE research. Beyond Faculty of Engineering, there are several research groups in the CUHK campus that are interested in the quantitative aspects of finance, in departments including Statistics, Mathematics, Economics, and Finance. All these have provided a strong motivation to establish a Centre for Financial Engineering. The established of the Center of Financial Engineering at CUHK on October 1, 2013 represents a significant step in forming a strong FE/quantitative finance group in CUHK, and in Hong Kong. Under the leadership of the founding Director, Prof. Xunyu Zhou, the center has achieved some remarkable progress in the past one and half years in assembling research teams and in organizing regular seminars, conferences, distinguished lectures, and short courses.