Prof. Novriana underscored that mathematics, often perceived by the general public as abstract and difficult, actually holds immense potential for addressing real-world issues. She explained that real-world challenges can be translated into mathematical problems through the process of making assumptions, developing formal mathematical equations, and applying mathematical tools for finding the solutions.

She further emphasized that this process is iterative, meaning that the results of a mathematical solution must be validated against actual data. If the outcomes are not satisfactory, the assumptions are re-evaluated and the mathematical formulation is refined until the solution provides accurate predictions or recommendations to specific problems.

The Mathematics Study Program at ITB has included a course on Mathematical Modeling since the 1964 curriculum. However, a significant shift occurred in 2002 when the course began to focus more on solving practical problems encountered by industry, government, and other sectors. Under faculty supervision, students are tasked with solving real-world issues through mathematical approaches.

Prof. Novriana also discussed a range of studies, including mathematical models in Islamic finance, banking, and financial driven optimization research. These studies go beyond academic theory and aim to offer practical solutions to concrete challenges faced by the financial industry.

^{Prof. Novriana Sumarti, S.Si., M.Si., Ph.D., from the Faculty of Mathematics and Natural Sciences delivered an oration titled "Financial Mathematical Modeling and Its Optimization”}

In her research on Islamic finance, Prof. Novriana illustrated how mathematical approaches can be employed to predict future conditions and run simulations to optimize key parameters in Islamic finance. According to her, one major issue in this field is the profit-sharing scheme, which some investors find less satisfactory than conventional interest-based schemes. Therefore, the mathematical models she developed aim to simulate and optimize critical parameters, such as determining the optimal profit-sharing ratio for varying economic conditions and business types.

She also addressed the application of mathematical modeling in the banking sector, particularly for Islamic banks, which face unique challenges due to the prohibition of interest (usury) in profit distribution. The developed mathematical models aim to predict a bank's future performance using existing financial data.

One notable piece of research discussed was the application of the Lotka-Volterra model in banking, which is typically used in biology to model species interactions. In this context, the model is used to analyze the relationship between a bank's deposits, loans, and equity. The method allows researchers to forecast the bank's liquidity and solvency conditions. This modeling helps in anticipating liquidity risks, which are a major concern for banks.

Prof. Novriana also emphasized that financial optimization research should focus on optimal investment returns. According to her, in financial optimization, not only costs must be minimized, but returns should also be optimized.

She hopes that financial mathematical modeling will extend beyond academic environments and be applied across various industries to improve decision-making process, helping them become more accurate and efficient in facing future challenges.

Reporter: Iko Sutrisko Prakasa Lay (Mathematics, 2021)
Translator: Hanifa Juliana (Urban and Regional Planning, 2020)
Editor: Anggi Nurdiani (Management, 2024)