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“If you can think back to a time when banks had branches with local managers, it has been very well-documented that they are much better at assessing creditrisks than people back in head office, for example,” the authors explain.
The very act of diversifying trade patterns itself does not come without any risk, as transport costs are likely to grow, and companies are forced to operate in unfamiliar markets with unfamiliar bureaucracy. Add in currency and creditrisks, and it’s by no means an easy pivot to make. ”
Technology change is speeding business up and providing an edge for disruptive innovators. It used to be that you could learn the core skills for a career in college and graduate school – think management, accounting, law – and then apply it over forty years. What do leadership teams most struggle with in the new environment?
Most of these “affordable” loans were in fact sub-prime, “for persons with blemished or limited credit histories,” and “carry a higher rate of interest than prime loans to compensate for increased creditrisk,” according to HUD.gov. But was it a new financial world?
Identify opportunities for innovation. Innovation continues to be a source of promise for Big Data. Success stories of Big-Data-enabled innovation remain relatively few at this stage. But funding won’t be enough; innovating with Big Data will require boldness and imagination as well.
There is a tendency with any new technology to believe that it requires new management approaches, new organizational structures, and entirely new personnel. Ash Gupta is President of Global CreditRisk and Information Management at American Express, and Guy Peri is Chief Data Officer and Vice President of Information Technology at P&G.
Think of the colleges that are increasingly able to identify students at risk of dropping out and intervene before they do. Or lenders’ enhanced abilities to gauge creditrisk. Medtronic is using big data and advanced analytics to drive their approach to patient and physician support and manage supply chains.
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