Data Art, Not Data Science: Douglas Merrill on How to Fix Lending Inequity
In a recent Wired Money talk (embedded above), Merrill says that to get big data right, you should have the approach of an artist. Doctors, mathematicians, and computer scientists can all fall into the data artist column as long as they understand the quirks of data, how it’s represented and actually think through what they’re looking at.
Doing this right—actually understanding the math and the importance and nature of data—can revolutionize the next huge business field poised for a reworking: lending.
Merrill says you used to have to go into a bank and sit at a big mahogany desk for a loan. It was a holistic approach. This game was changed when it left the “handshake oriented world” to the world of math. But problems remained. People were left out and remain left out because Merrill says little has changed from 1989 to today in terms of underwriting.
“20% of people in the first world have either a ‘thin credit file’ or has material errors in it,” says Merrill. This leaves people who should have credit out of the market and can take people off the grid just because we’re not doing our underwriting correctly.
To do it right we need to focus on the data artists—nurture the approach that doesn’t focus just on math. Doing so will fix a inadequacy in a system that should have advanced much further in the last 25 years.
In his talks, Merrill shows audiences how to think more innovatively about big data, and, how to apply the opportunities it presents to your business. To book Douglas Merrill as a speaker, contact The Lavin Agency.