Digital risk management: challenge and opportunity

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The digitalization has changed communication, interaction, and the business of life. By digital economy companies and financial service providers of a valid decision basis for the calculation of business risks in real-time benefit information. The advantages are mainly in the objectivity of the backed up data quality and, not least, the speed of the available information. gi money Institute talked with Grit Bantow, Director of the Center of Competence for B2B, the SCHUFA Holding AG, about the challenges and opportunities of digitisation in the B2B risk management.

Digitales Risikomanagement: Herausforderung und Chance

Risk management requires a robust Interpretation of the existing data image source: Robert Kneschke – fotolia.de

How to change the digitalisation of processes in business?

Grit Bantow: The global data volume doubles every two years. This huge amount of data requires in the future a massive Expansion of fully automatic processing processes. In this context, we also speak of industry 4.0, and thus of the communication and data processing in a largely Autonomous Machine-to-Machine systems. Cloud Computing technologies, digital communication processes, knowledge and innovation management and E-Learning are increasingly finding their way into the company’s processes. According to a recent survey, companies in the industry expect cross-sales increases as well as cost reductions through industry 4.0 and are willing to invest accordingly. Among the priority objectives of the digitization, in particular, to increase efficiency and growth. So far, German companies digitize your sales and sales. The large amount of data requires also new ways of Processing – such as the so-called background processing. It is used to shorten the processing time and increase the machining quality and standardized operations that require no user interaction. How many companies are also economic bureaus, the challenge is to move only the storage and processing of the data but also evaluating it on the machine. With regard to the valuation of companies, first, to understand the data, to process them in a sensible and conscientious, and evaluate. Methods that are already Standard in the financial industry. For example, Predictive Analytics, pattern recognition is used and for the automation of decision-making processes. These processes, often with Machine Learning Algorithms. With mathematical-statistical methods, there is a sharpness here, a high separation, a high prediction probability or forecasting quality for clear bases for decision-making delivered.

 

What are the implications for risk management?

Each business transaction is first of all an open account, i.e. a risk. Before confirmation of the Order should, therefore, ideally all of the risks to be known, to be able to business opportunities with security to be fully exploited. The core competence of the risk Manager to make decisions, is complemented by the fully digital processes of information gathering, processing, and deployment for accurate forecasting and predictable business risks useful.

 

How can agencies respond to this challenge and help companies?

For example, through the provision of digital economy, information and secure decision-making basis for business transactions – in real-time. Usually, Economics will be researched, information-consuming, manually and by phone. For this type of information procurement and evaluation companies in the digital age, simply no more time. In addition, evaluation of algorithms on company data extended to the company in the Form of individualized score cards in their systems back to be played. Thus, the forecast quality and separation increase, the sharpness, especially in automated processes and thus allow for the expansion of the business with good customers and avoid failures and follow-up process cost by customers with a high risk of failure.

 

Why is the Information of information in real time so important?

Between the first request from a potential customer and the decision for or against the inclusion of a business relationship may often only seconds. Because potential customers are no longer willing to wait a long time for a business degree. About the factor of speed, economy, information should be objective and valid data. The SCHUFA may currently companies to 5.2 million register jointly controlled, but also small businesses, self-employed and freelancers valid, clear-cut economic information about supply. In addition to the information from the company database, we have credit-related information to 66.4 million individuals, which welcome to our around 9,000 contractual partner of the credit economy, trade and E-Commerce according to the principle of reciprocity on a daily basis and automatically validate.

 

What are the special characteristics in the B2B-to note risk management?

The private financial behavior of decision-makers, in particular, of the owners, has a strong influence on their financial behavior in the Business. This is especially true for small trader or self-employed. The smaller a company is, the more important is the managers that decide about his fate. 90 percent of German companies have less than 20 employees. It is precisely here that a meaningful credit assessment must include business partners, the people behind the company. In the case of B2B, a information of the SCHUFA flow, therefore, credit information the executives in the company’s valuation. So just in the SME Segment meaningful economic information can be obtained from – a decisive advantage for the risk management.

 

What information are particularly relevant and how extensive the economy should be information?

Credit index, payment experiences and credit limit are the key factors for doing business. The scope of the underlying business information should be in line with the level of risk and individual need for information. Economic information should therefore be built to be modular, to be able to the specific decision situation.

 

The Short, Compact and Full information of the SCHUFA is, therefore, quite in accordance with the risk-adequate information to the specific decision situation. Depending on the industry and the customer group can be developed also tailored score cards, which are specifically tailored to the individual needs and requirements of the company. For this purpose, both credit and identity information of the SCHUFA, but also companies can be included in your own data.

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