💥Noise is everywhere. financialservices, banking insurance government retail health.
What is noise?
“A variability that should not exist. When people make a judgment that should be identical because they are about the same subject”, said Daniel Kahneman.
The challenge with noise is the difficulty of pointing it out. There is no right or wrong answer; by its definition, it is the variability of the results.
The problem?
🚩Noise clots the judgment.
A high financial cost, bad reputation, and customer dissatisfaction are associated with neglecting to rectify the noise.
Why?
💣Because noise is NOT an average of zero and WILL NOT sort out!
For instance, look at underwriting and claims in insurance. On average, underwriters price correctly, but sometimes they price way too low and sometimes way too high. When the price is way too low, the company will lose money by paying in claims, and when it is too high, the company will lose business to competitors. So, as you see in this example, both mistakes are costly.
💡Using the decision-centric approach leveraging DecisionIntelligence to automate and augment business decisions will REDUCE the noise to a high degree because the decisions are explicitly modeled and executed using businessrules algorithms and data.
🚀Automated decisions guided by the Decision-Centric Approach® and powered by the Open Decision Intelligence Platform are better able to make certain kinds of judgments than humans as they don't suffer from noise. They make Quick, Accurate, Consistent, and Transparent business decisions.
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Published November 20th, 2024 at 07:30 am
