July 2013

Big Data and Risk

Big Data A Vital Tool For Risk Managers

 

RM Professional recently reported on our appearance at an IRM seminar on Big Data and Risk.  The article is reproduced below.

An expert group of risk practitioners have tackled the topic of big data at an Institute of Risk Management (IRM)  seminar in London, UK.

The institute's innovation, value creation and opportunity special interest group (IVCO SIG) held the session on 9 May to discuss big data in relation to risk management, how to define big data, and the impact big data can have on reputation.  

To an audience of around 90 cross-industry risk professionals, Martin Massey, chief risk insurance officer at AIG, compared big data to an iceberg.  

'Data is like an iceberg - a bit like risk management really - floating in the ocean, only a tiny bit visible at first sight, with much of it hidden beneath', he said.  

Firms can use big data to detect fraud, predict mortgage defaults, analyse flight recorders, anticipate travel delays and to predict and track stock movements, Massey told the audience.  

However, he said that 'lots of companies  are unaware of small data solutions at the moment, let alone big data solutions'. He added: 'Data is going to get bigger and bigger, and people will have to think differently about how to manage it. Talent matters as much as technology.'

Massey went on to outline the 'key rules' for using big data, which were:  

  • Never throw anything away
  • Store it carefully
  • Keep it clean (organise it)
  • And play with it.

Later in the same session, Steve Leigh, co-founder and partner at Reputation Consultancy, said that big data services can help firms manage their reputation.

'Organisations are right to be worried. The rules have changes. We are less in control [of our reputation] than we used to be,' Leigh told delegates.  

But he concluded that big data was an 'enabler' for businesses and also offered opportunities, such as risk professionals making the interpretation of big data an 'evidence-based part of their roles', as long as they found the right tools.