We get it. You’re juggling monthly collections targets to manage delinquencies and defaults while feeling the pressure to automate, innovate, and incorporate new data sources for portfolio optimization.
Can you really do both? Can you empower your team to drive innovation and manage risk effectively? Absolutely.
Here are three essential skills or mindsets to help you succeed:
At BankersLab, we use simulations to explore various levers that impact portfolio profit and loss. In a team-based simulation environment, participants engage in productive discussion and brainstorming about the most material portfolio drivers including new data sources.
Skill #1: Understand Key Portfolio Drivers
“The art of being wise is the art of knowing what to overlook.” – William James.
In other words, we need to manage information overload. This is accomplished by focusing on the biggest cause-and-effect relationships in the portfolio. You will need to flex your subject matter expertise muscle.
Let’s stop nitpicking over small expense line items, and address the big issues – like account attrition or adverse selection.
With so many tech options and sophisticated models available, it’s easy to get overwhelmed. Focus on the critical drivers in your portfolio to cut through the noise and prioritize impactful innovations.
Skill #2: Test and Learn Your Way to Success
Adopting a continuous test-and-learn mindset is a powerful driver of both innovation and sound risk management. When teams practice these skills in simulations, we see a 30% improvement in net income just from testing competing strategies.
In these simulations, teams learn to design clean experiments with clear hypotheses and measurable outcomes. Mastering test-and-learn means you’ll always have data to back your next action, insight, or investment.
Skill #3: Empower Your Data to Speak
“Data isn’t units of information. Data is a story about human behavior – about real people’s wants, needs, goals, and fears.“
-Daniel Burstein
With big data, we’re sifting through mountains of information for meaningful patterns. Analyzing portfolios by vintage and delinquency bucket is standard, but what happens when we add new data, like cash flow information? How do we ensure the patterns stand out?
Step back and think about the story your data is telling. Communicate it clearly and visually. This is the ‘last mile’ that will help get others on board with your next action, insight, or investment.
