Cryptocurrencies, hospitals and cows: Announcing the winner of the 2018 Cambridge-McKinsey Risk Prize

We’re pleased to announce the winner of this year’s Cambridge-McKinsey Risk Prize: Ann Sofie Cloots, whose winning essay, “Cryptocurrencies, Blockchain, and Risk Management: Legal, Operational and Systemic Risks,” took on one of the hottest topics in technology today.

She was awarded a prize of £3,000 at the annual conference of the Cambridge Centre for Risk Studies on June 20, attended by finance, industry, and academic delegates.

The Risk Prize awards the best essay on risk management by a current master’s or PhD student at Cambridge University. The judging panel included representatives from the Cambridge Centre for Risk Studies, Cambridge Judge Business School, and McKinsey’s Risk Practice. At McKinsey, we study the ways that the world is changing every day. Our Risk Practice helps organizations across all industries build resilience and create value. As the global business and economic environment faces greater volatility, a risk-informed strategy can be a major source of competitive advantage.

Trained as a lawyer, Ann Sofie spent the last few years completing her PhD in economics. During that time, she became interested in cryptocurrencies and blockchain. She noted how what started with cyberpunk leanings has grown more and more institutionalized: “I was always reading about it, but I was focused on finishing my PhD. It’s always been a big curiosity of mine and this essay was the perfect opportunity.”

Ann Sofie would like to continue her research in Cambridge. “It’s an amazing place to be if you’re interested in the blockchain.” As for her essay, she said, “my hope is that anybody who is vaguely interested, who wants to understand the risks behind the hype, the risks that we may not be discussing sufficiently” will read it.

As the global business and economic environment faces greater volatility, a risk-informed strategy can be a major source of competitive advantage.

She was chosen among two other finalists, Sean Day and Sipke Shaughnessy. Sean’s essay “Strategic Risks Threatening US Hospital Systems,” lays out how trends may combine to upend hospitals. “My essay highlights business risks for large hospital systems in the United States, particularly focusing on two trends that are more uncertain: the interoperability of IT and the degree of consumerism—what power do patients have?” he explained. If he could have anyone read his essay, it “would be leaders of large hospital systems, like the CEO of Kaiser or Mayo Clinic.”

Sean, who hails from New York, studied bioengineering and completed a Watson Fellowship, during which he traveled around the world and explored healthcare systems in Ethiopia, India, and Japan, among others. During that time, he recognized the need for systemic solutions and joined a leading e-health vendor as a business and operations analyst. He just completed his master’s in technology policy at Cambridge, and said, “This essay was a cool way to combine all of those interests.” Sean hopes to continue working in the field of digital health in the United States.

Sipke’s essay, “How do East Africa’s Pastoralists Deal with Risk?,” observes how certain traditional practices are founded on widely applicable principles that could help with risk management in any business. “Pastoralists are people who herd livestock, and frequently do so nomadically,” he said. These pastoralists have developed many ways that reinforce a strong and wide social safety net, through practices like ritualized gift giving, which are intended to create strong bonds among different individuals and different households. “That enables them to pool their risk, so that in cases where households see their herd decimated, they can ask people who they have given gifts to reciprocate and contribute a heifer that could help them rebuild their livestock herd. Interdependence between families or firms can be seen as a strength rather than a weakness.”

Sipke grew up in County Cork, Ireland. “I grew up around a lot of cows, so maybe that’s where the interest in pastoralists started,” he said. He’s currently pursuing his PhD in the geography department, where his research explores how pastoralists have dealt with new economic developments like land privatization and cash-based markets. He conducted interviews, but he also tried to participate in the local economy himself by buying his own herd of goats.

All of the winning essays can be downloaded here. Congratulations to our finalists and winner!

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