The continuing growth of commercial finance means that finding appropriate levels of skilled personnel is an increasing challenge. The impact of bad debts severely impacts
profitability. In general terms, a bad debt which
represents 1% of funds employed will equate to around a 10% loss in pre-tax profits. The parent bank may lose confidence in the commercial finance subsidiary, careers can be at best stalled, at worst people can lose their jobs! A number of commercial finance companies have been shut down as a result of bad debts.
Our solutions The RiskFactor software suite is designed to support all of the decision-making relating to the risks inherent within a commercial finance company. The unique software is designed purely to
support the knowledge workers, the decision- makers within the organisation. The operational and processing systems gather large quantities of data as a by-product of supporting the daily operational activity. We take a feed of this data on a daily basis and carry out a series of complex calculations and algorithms. From these we are able to identify patterns and behaviours of individual clients which indicate risk and potential fraud. We have been able to develop this series of rules and algorithms based upon access to tens of thousands of client cases within our customers around the world.
The results of the analysis are delivered to the users in an elegant graphical user interface providing the information in a clearly understandable format.
Our software is designed to receive data from various sources within the organisation such as financial statements and external data generated by information bureau. From this we are able to distil the key elements and deliver a comprehensive, integrated and most importantly, consistent view of risk throughout the organisation. The net effect is to enable the users to make rapid yet high-quality decisions. The openness of the information means that it is accessible to everyone in the organisation. The risk of the client manager misreading the signs, or being deliberately misled by the client, can be challenged. We are strong advocates of the four eyes
principle.
Compliance The key to successful risk management is to ensure that all risk management and operational activity is rigorously followed up. RiskFactor’s workflow engine generates both manual and automatic workflow items. It provides a full audit trail ensuring that
everything is fully and rigorously carried out and the actions taken by the client manager are fully recorded.
It also demonstrates to the parent bank and to the regulatory authorities that all of the necessary processes and procedures are carried out.
Tim Yates, RiskFactor Solutions, tel: +44 (0) 1444 819462,
e-mail:
tyates@riskfactor-solutions.com,
www.riskfactor-solutions.com
Mixed picture across service sector – CBI survey T
he UK’s service sector had a mixed quarter with business volumes among consumer services falling unexpectedly, and firms operating in business and professional services seeing little change. The latest quarterly CBI service sector survey was conducted between 27 October and 10 November, and covered 169 service sector firms. They are divided into business and professional services and consumer services. In consumer services, the value and volume of business fell unexpectedly during the quarter. Of those surveyed, 30% said the value rose and 38% said it fell, giving a balance of -8%. That was weaker than the modest growth
16 November/December 2010
that had been expected (+8%). Looking at the volume of business, 23% reported a rise, and 41% a drop, giving a balance of -18%. That too was weaker than expected (+9%). In the next three months, consumer services firms expect business values (-8%) and volumes (-20%) to contract further. Average selling prices rose at a slower
rate (+11%) than over the previous quarter (+19%), while the growth in total costs per person employed strengthened (+32%). Profitability stabilised during the quarter (-3%), but is expected to dip slightly in the next three months (-6%).
In business and professional services, the value and volume of business were both
Business Money
Proof of concept If you are in the unfortunate position of having suffered a significant bad debt at some stage in your career, you appreciate what a devastating impact this can have. If you have had the good fortune not to have encountered this yet, you want to maintain your record! The best way to demonstrate how we can help you is to ask you to send us a small sample of data. We can then present this information back to you within RiskFactor to illustrate you how we can support your risk management needs.
Please take a look at our website to read what our customers say about RiskFactor.
flat during the November quarter at -3% and +3% respectively. In the next quarter, values and volumes are expected to fall marginally at a balance of -4% and -7% respectively. The fall in selling prices intensified,
-29% compared to -16% in the previous quarter, and growth in total costs per person employed accelerated (+18%). As a result, profitability fell (-13%), though at a slower rate than the previous quarter. Profitability is expected to fall further in the coming quarter (-20%).
Ian McCafferty, CBI chief economic
adviser, said: “The recovery of the service sector is proving bumpy in the face of sluggish demand.”
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