By Ray Vazquez on April 3, 2021
The Squirrel may be nature’s risk analyzer. As you drive by and see squirrels going back and forth – “should I cross? Should I not cross? Is now a good time to cross? Maybe I shouldn’t cross? What’s the value proposition of crossing? Am I taking too much risk here? What’s the cost benefit of crossing?. . The questions go on and on. That squirrel is analyzing a significant amount of data, but the velocity of risk “aka your car” is too fast sometimes for it to fully evaluate options and make a decision.
The amount of data available to risk managers today is 100x what was available just a few years ago. Complex analysis takes place to quantify risk. Yet, the velocity of risk is often overlooked when evaluating risks. Like the squirrel, by the time you get to an answer, it may be too late.
Data is only half the battle in risk analytics. The quality and what you are trying to answer are critical factors to arrive at decisions and/or recommendations that are actionable and fruitful.
Next time you’re drowning in data trying to answer risk questions, remember the squirrel and remember the velocity of the risks you are trying to measure, perhaps that may help you move quickly before it is too late.