Today I am privileged to be speaking at WeDo’s 2016 US Conference, which is being held in Miami, Florida. I will be joined on stage by Black Swan Editor Dan Baker and we will contrast global trends in revenue assurance and fraud management to the specifics of what is happening in the North American market. Whilst Dan will be his usual charming self, my job is to be the gadfly that stimulates debate. I will be talking about the worldwide forces that will cause telcos to adopt a more sophisticated and comprehensive form of risk management – or else risk delivering substandard returns to shareholders. Dan will then relate this global push for superior risk management to the findings of his research, most specifically covering the changes occurring to the practice of RAFM in North America.
The bald eagle is the emblem of the USA, and the eagle is a useful metaphor for risk management too. Eagles are known for their acute vision; they have to see further and more precisely in order to thrive. Risk managers also look ahead, and strive for precision even when the future is hard to predict. But the eagle’s eyesight did not evolve for the sake of sport. Eagles look for prey, and will go hungry if they do not see any. Hunger is an important motivating factor. It is my contention that telcos in Africa and Asia may prove to be hungrier than those in the West, and so develop superior risk management. In this case, the concept of superiority means the telcos will be able to take on more risk – such as the risk associated with launching innovative products like mobile money – but be able to reduce the volatility for their business through a better understanding of aggregate levels of risk and improved techniques to mitigate those risks.
My presentation will revisit themes I discussed at the WeDo Worldwide User Group in Lisbon, particularly around the need to walk the path which leads from RAFM to enterprise risk management, whilst maintaining realism about the scale of the journey ahead of us. I will also draw on an earlier presentation that observed how the Japanese used data science to reduce the number of defects in car manufacturing, empowering a productivity drive which saw them overtake the USA as the leading producer of cars. The same kind of thing could happen in telecoms, as a result of applying data science to the risks we face. If we think we have already conquered risk management then we are fooling ourselves. Those who accept the magnitude of the challenge without feeling overwhelmed will benefit from the most rapid progress.
After I set up my argument, Dan will seek to knock it down by showing how North American telcos are already adopting fresh thinking about RAFM. To stop me gaining any unfair advantage, Dan will not reveal his presentation to me before he gives it on stage. But you can see my presentation before, because I have shared it below. Enjoy!