Analysis Featured

Big data analytics can assist credit risk managers, debt collectors

(Sponsored article)

Perhaps the most important practice in making sound business decisions in the contemporary economy is the cultivation and analysis of data. The term “big data” was coined in recent years, and is meant to serve as a reflection of the massive compilation of industry information that has become readily available – and consistently archived – by organizations looking to improve their chances of success.

Big data can provide valuable insights for a plethora of different verticals, including debt collection and credit risk management. Organizations within these particular industries can position themselves to achieve sustainable growth by applying the use of data analytics.

Credit risk managers can better assess potential borrowers with big data

Industry expert Sebastien Clouet wrote an article for Bobsguide in which he suggested that the utilization of big data and analytics can inform important business decisions for credit risk managers. By delivering visibility and increased levels of understanding regarding loan applicants, he said it can become easier to complete risk assessments and evaluate the potential revenue returns associated with each borrower.

Clouet noted that advanced data can offer more detailed reports on payment backgrounds than were previously available to credit risk managers, opening up new doors through which successful decision-making can be facilitated. Combining data with real-time analysis is a powerful move for industry members, shedding light on constantly updated variables, according to the author.

Big data can offer unprecedented financial strength within the risk management market, Clouet said, and can lead to more accurate measurement of prospective borrowers.

Simplifying debt collection through data analytics

Forbes contributor Tom Groenfeldt reported on an unnamed lending organization’s success in employing a data analytics firm, Mu Sigma, to better evaluate and predict company trends. He offered an explanation regarding big data’s current prominence – it often shows that traditional collection processes are not always the most cost-effective, a revelation that sometimes leads to significant cuts in expenses.

Groenfeldt remarked that Mu Sigma consulted with its client to develop a probability model that measures the likelihood of collection based on payment histories. The model also provided estimation of the potential impact of every action within the organization, which served to provide a foundation for maximizing success.

The author interviewed Mu Sigma’s head of values and strategy, Tom Pohlman, who admitted that the biggest problem the consultancy firm faces is inconsistent data. Continuously provided and accurate data is paramount to achieving analytical success, but Pohlman suggested that information is so often replicated and repurposed that it can sometimes be invalid. The importance of accuracy in big data analytics cannot be understated, which is why Mu Sigma – and presumably other data consultants – has worked to develop new algorithms and procedures on a regular basis.

Big data has arrived as an imperative analytical tool in the business world, and it is vital that companies of all sectors use it to determine the effectiveness of their various products, services, marketing campaigns and other expenses. Debt collectors and credit risk managers can use carefully analyzed data to make strong, informed decisions and position their organizations for success.

For more articles about Risk Management click here.

Author: Sean Albert – SVP & Chief Marketing Officer MicroBilt Corporation

About the author

George Popescu

Serial entrepreneur.

George sold and exited his most successful company, Boston Technologies (BT) group, in 2014. BT was a technology, market maker, high-frequency trading and inter-broker broker-dealer in the FX Spot, precious metals and CFDs space company. George was the Founder and CEO and he boot-strapped from $0 to a $20+ million in revenue without any equity investment. BT has been #1 fastest growing company in Boston in 2011 according to the Boston Business Journal and the only company being in top 10 fastest in 2012-13 as it was #5 in 2012. BT has been on the Inc. 500/5000 list of fastest growing companies in the US for 4 years in a row ( #143, #373, #897 and #1270). After the company sale in July 2014 until February 2015 George was Head-of-Strategy for Currency Mountain ( www.currencymountain.com ), a USD 100 million+ holding company focused on retail and medium institutional currencies, precious metals, stocks, fixed income and commodities businesses.

• Over the last 10 years, George founded 10 companies in online lending, craft beer brewery, exotic sports car rental space, hedge funds, peer-reviewed scientific journal ( Journal of Cellular and Molecular medicine…) and more. George advised 30+ early stage start-ups in different fields. George was also a mentor at MIT’s Venture Mentoring Services and Techstar Fintech in NY.

• Previously George obtained 3 Master's Degrees: a Master's of Science from MIT working on 3D printing, a Master’s in Electrical Engineering and Computer Science from Supelec, France and a Master's in Nanosciences from Paris XI University. Previously he worked as a visiting scientist at MIT in Bio-engineering for 2 years. George had 3 undergrad majors: Maths, Physics and Chemistry. His scientific career led to about 10 publications and patents.

• On the business side, Boston Business Journal has named me in the top 40 under 40 in 2012 in recognition of his business achievements.

• George is originally from Romania and grew up in Paris, France.

Add Comment

Click here to post a comment

Your email address will not be published. Required fields are marked *

Testimonials

default image

"Your daily letter is great!" , Ram , Founder and CEO, PeerIQ

default image

"Hi George - just want to tell you that you are doing a great work with Lending Times;-) Brgds, Kasper" , Kasper, Partner and Co-founder at Dansk Faktura Børs A/S

default image

"I've been following your newsletter for some time now and have been very impressed with the content." Charlie,Co-Founder | Bolstr

default image

"Hey George, I must say I really enjoy your site. It has inspired me to do some changes at our platform and we are the biggest consumer lender in Sweden." , Ludwig, CEO @ Savelend Sweden AB

default image

"Your daily email is very useful. It gives quick update on what's going in the market. Thank you very much for all that info." Yann Murciano, Head of Base Metals Trading at Morgan Stanley

Our daily p2p news digest

Daily News Summary Digest Sent Daily To Your Inbox