Credit Risk Analytics Isn’t Just For Fintechs and Industry Giants, Small Firms Can Benefit too

Risk Management & Data Analytics for Small Businesses

The early days of risk analytics were marked by fintech revolutions and financial services giants embracing big data programs. This left the rest of the industry – the small and mid-sized banks and credit unions – maintaining the status quo and wondering how they would keep up. Now, we’re entering an era where big data in banking isn’t just for a few organizations, but is becoming mainstream.

The rapid rise of risk analytics
According to a report from The Wall Street Journal and Deloitte, risk analytics shouldn’t just be approached as a way to improve how firms analyze and assess risk. Instead, it should be considered a transformation. The goal is to use data to drive greater alignment between:

  • Strategy.
  • Governance.
  • Culture.
  • Business models.
  • Technology.

The report argued that financial institutions need to completely revisit the ways they gather and use data in order to keep pace with new demands. In particular, firms are dealing with regulatory pressure that has a far-reaching impact on the way companies manage and use financial data. Furthermore, firms are being pushed to move beyond simply lowering risk and to instead put an emphasis on optimizing the processes that surround their risk management operations. By optimizing risk, firms have an opportunity to strengthen the returns they get from lending practices and monetize the risk management process.

“By optimizing risk, firms have an opportunity to strengthen the returns they get from lending practices.”

All of these gains represent a transformative shift in financial services, and smaller organizations can’t afford to let the movement leave them behind. Transparency Market Research pointed out that while the risk analytics market is rising quickly, many smaller firms are struggling to keep pace because of a lack of awareness about the technology. It’s time to change that. Here’s a quick look at how technology is becoming more accessible.

Making analytics accessible
As cloud computing has evolved, risk analytics solution providers have built out technological architectures that allow for more cost-efficient service delivery. Modern risk analytics solutions can be deployed with minimal investment in on-site hardware. Instead, organizations subscribe to analytics platforms that deliver strategic data gleaned from various sources to users, regardless of device format. This is made possible through:

  • Strategic partnerships with data clearinghouses that allow risk analytics systems to access large quantities of information without having to store that data locally.
  • Processing resources that are unified across a variety of machines, making it easier to handle huge volumes of data without an overly-specialized IT configuration.
  • Credit scorecard systems that are updated and optimized based on a wide range of information types.

In essence, the entire computing side of big data is handled within the risk analytics platform and delivered to users in an accessible, actionable way. GDS Link has been leading the charge toward accessible risk management founded on data. We’ve been ushering in an era in which a wider range of financial services organizations can further monetize lending through analytics-driven risk management. Our analytics solutions provide a 360-degree view of risk decisions, putting the right information into the fingertips of your workers. Contact us today to learn more.

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