Better Financial Risk Management With Machine Learning

How does one go about preventing credit frauds, ensuring the reliability of someone that one proposes to give a loan to, or, more generally, taking safer decisions when it comes to something as tricky as financial risk management?

This isn’t a new question, of course – it’s been around as long as people have borrowed and bartered, and over the ages the finance industry has come up with several methods of trying to address this concern. The latest has been to take the approach of statistical modelling, and one has to admit, this has helped matters tremendously. Banks are able to paint a more detailed picture of what their overall risk profile is, and avoid seriously risky situations.

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With great Growth Comes Great Responsibility!

The last year-and-a-half have been the most amazing roller-coaster ride for IDfy.  We have grown from 20 people to about 150 at the moment. We continue to grow, and expect to hit the 200 people benchmark within the next 2 months.  While we have grown significantly, we have tried to retain the start-up ethos.  What that means is that we learn, implement, and change quickly, but most importantly, we listen. We listen to our customers and our employees, as well as our partners.  As C.E.O., my biggest challenge is ensuring that we do all of this at breakneck speed without compromising on quality, training, and other critical areas.

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Informatics, the future of HR

I remember one of my customer meetings last month quite vividly. It was with the HR General Manager of a multi-national manufacturing company. Perhaps one of the most affable people I have met, he spoke at length about his experience managing HR in different companies and interspersed his speech with lively anecdotes and his opinion about the changing role of HR.

“HR owes its origin to Industrial Relations” he began. The nature of the workforce has, obviously, changed a lot since the Industrial Revolution, but it is not difficult to imagine that about a hundred and fifty years back in Victorian England, there might have been a clique of managers specialising in dealing with workers in coalmines or shipyards. Around the turn of the century, with communism in the air, it couldn’t have been too easy for those managers. A seismic change might have begun.

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Digging Deeper

The month of May can be cruel – it’s the peak of summer in most parts of India, and being out for even a few minutes in the sun can be gruelling. But the weather isn’t the only thing you should watch out for in May. If you’re a recruiter, you should be paying extra-close attention to the ‘Experience’ section of resumes that candidates hand over to you.

It so happens that the maximum instances of people lying about their work experience to obtain a job, occur in May. This is why one needs to be extra vigilant at that time.

And what about October? Summer’s well over by then, and even the monsoon has faded – but even then, the heat is on. As the country goes into festival mode, and there is a flurry of shopping before the winter sets in, recruiters would be well advised to train their focus on the ‘Qualifications’ section of candidates’ resumes.

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There is more to Financial Risk than just checking credit ratings!

Financial fraud is all around us. People routinely con banks or simply default on large loans or credit card bills. There are others who take large insurance policies and submit wrong claims. I have had the good fortune of meeting many risk officers and underwriters, and have heard sordid tales of financial crime. The ingenuity of fraudsters never ceases to amaze me. Risk officers and underwriters are forever playing catch-up. Every time they adjust their systems and processes, a new type of fraud emerges!

I have realised that relying on a simple credit score isn’t enough. Neither is just checking one’s address. We have to go back to basics – establish some fundamental facts about the person who is about to take a loan, a credit card, or an insurance policy. It is important to know who the person is and uncover relevant information about their background.

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Better than Vague: Why Data is a Better Hiring Tool than Psychometric Testing

Suppose you’re responsible for hiring at your company, a fast-growing organisation that is causing ripples across the industry, but is not known for making waves yet: if you’re a Tier II company, or a fast-growth start-up, you need to hire the very best talent out there, right?

Wrong.

Hunting for the ‘best talent out there’ doesn’t really help your firm. What you should be looking for is the best talent for your organisation, your situation, and your business aspirations.

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