Risk & Compliance Still little technology use in Risk Management

Sep202005

I'm still at the Teradata show but I saw this interesting article - Despite Growing Concern to Manage Risk, Most Companies Struggle to Take Action - in which a recent survey was quoted. One quote, in particular, caught my eye:"The use of technology in risk management appears to be in its infancy, with only a quarter of companies using technology to identify existing risk, project future risk, and reduce risk. More than a quarter of the survey's respondents don't leverage technology to enhance risk management," Hermanson said. "As the practice and implementation of risk management mature, more executives will recognize and rely upon technology solutions to provide the infrastructure of risk management."Clearly the potential for executable, predictive analytic models and business rules management system technology is out there but it is not widely recognized by those who must take on critical risk management issues. There's more on this in the Compliance section of this blog and I think we can expect to see more of this. Encouraging stats from...

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Analytics & Optimization CRM Analytics and EDM – a Gartner perspective

Sep182005

Got an interesting perspective on CRM analytics from Gareth Herschel of Gartner today (I am at the Teradata Partners conference) that I thought meshed really well with some of the EDM concepts I have been discussing elsewhere on this blog. He was discussing real-time or right-time analytics in a CRM context. In particular there were three things he said that resonated with me: What's critical is the time it takes you to act not the time it takes to analyzeIn other words, it does not matter if you have real-time data and real-time analysis tools if the time it takes to persuade others of the analysis and the time it takes to implement is still measured in weeks or months. It matters how long it takes you from when you could know something to when you do, in fact, change your behavior based on it. Optimizing this decision process is a key element of Enterprise Decision Management. There is a gap between the data we have, how much we can analyze and how much analysis we can act on.The amount of customer data the typical company has is growing exponentially. There...

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Analytics & Optimization Preventing Identity Theft

Sep162005

Identity theft is a hot topic these days. There is a lot of talk about steps you can take to help prevent it - myFICO has a great set of suggestions for instance - and one can also be very alert to it having happened. All that said, how can technology help PREVENT it? Well early detection and effective resolution involves combining several distinct things: A broad data set to help identify people accurately Sophisticated analytics to leverage this data to make predictions of risk The ability to manage rules defined by privacy and other regulations The additional ability quickly change or add rules to respond to new fraudster approaches An efficient human review capability Let's take each of these. Data is a double-edged sword these days - there is more data available to verify someone's identity but all this data is also available to be hacked or abused, increasing risk. Data of different types, drawn from a wide variety of sources, can  be used to cross-reference facts that have been stolen, for instance, with data that has not and...

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Analytics & Optimization Working on the railroad – an InfoWorld horror story

Sep152005

InfoWorld has a great anonymous column "Off the record" and one entry, Working on the railroad caught my attention. Now this kind of story is sadly all too common, both in enormously complex "customization" projects for packaged or acquired software and in "build to suit" software. Massive overruns, hard to make it meet requirements, poorly defined requirements, massive enhancement projects after the implementation is "done" and, probably, an ongoing maintenance nightmare. Now I am not going to propose for a second that any technology choice could solve the myriad problems that show up in this story and hundreds like it. However I would like to address how business rules might have helped. If I acquired an application, packaged or from another company, that had been architected with a business rules management system at its heart, how might my experience be different? Well key decisions would be configurable by me so I could change the way the software behaved to better serve my needs. The rules being implemented would...

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Analytics & Optimization Customer Intent Driven Organizations

Sep152005

In an interesting Gartner report, The Next Phase of CRM Is a Customer-Intent-Driven Organization, Michael Maoz about moving CRM to an intent-driven organization. He talks about matching the intent of a customer to the intent of the enterprise. Reading through this, something you will need to be a Gartner subscriber to do, it seemed to me that several things are essential if one is to match the intent of one's customers to one's own intent in a profitable way. Customer-centric information Predictions of likely intent or response based on accurate predictive models Automation to make customer interactions easier, more seamless and more focused on what the customer wants, when the customer wants it A flexible engine for letting an organization to express its intent and have these expressions be managed by the business and deployed to all channels Deep personalization that applies rules to everything known about a customer to deliver targeted interactions that repay the customer's investment in giving information. In otherwords, CRM + EDM can lead to an...

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Analytics & Optimization PDC goes with the flow | InfoWorld | News | 2005-09-14 | By Eric Knorr

Sep152005

In PDC goes with the flow | InfoWorld | News | 2005-09-14 | By Eric Knorr there is an interesting definition of the difference between desktop apps and enterprise apps - workflow and business rules. Although at first sight it looks like Microsoft is announcing a new product to support both workflow and business rules, careful reading makes it clear that they are talking about the use of business rules IN workflow. Those of us who have been working with BPM and Workflow partners for a while realize that there is another class of business rules - those to do with business decision-making. Although it can make perfect sense to embed the rules for a process into a workflow tool like WWF and rules specific to a desktop application in that application's VBA, it does not make sense to embed decisioning rules into these applications. Decisions are, or at least should be, a corporate asset. They should be consistent across channels and processes and should reflect accurately regulations, policies etc. In addition many organizations have thousands of such rules and have to...

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Analytics & Optimization Real-time risk management

Sep152005

The price of fraud by Steven Minsky is a great overview of risk management, especially in how BI can be used as part of an enterprise risk management approach. It is also possible, however, to instantly detect suspicious activity in transactions and thus manage risk in real-time. Taking an enterprise decision management approach by combining predictive analytics, especially neural network models that recognize complex hidden patterns of fraud, and business rules both to capture emerging schemes with no history works well. In addition this approach can minimize unnecessary referrals and interference with legitimate transactions. One example of this is Falcon One(tm), Fair Isaac's software system for combating existing and emerging types of fraud across the customer lifecycle and at every customer touchpoint.   The Falcon One technology consists of a configurable set of detection, case management, and analytic capabilities to address any fraud type. This unified infrastructure enables multiple fraud solutions to work together consistently, sharing data and...

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