Season 2 Episode 17
Harnessing Data for Smarter Risk and Marketing Decisions with Matthew Komos of OGMA Risk & Analytics

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RESOURCES   ❯   The Marketing Rapport Podcast

Episode Summary

In this episode of The Marketing Rapport, host Tim Finnigan welcomes Matthew Komos, the Founder & CEO of OGMA Risk and Analytics, to discuss the evolving dynamics between marketing and risk management. Matthew shares his insights on the shifting power of choice to consumers, underscoring how the pandemic accelerated this trend. Consumers now have the convenience to make financial decisions from home, and businesses must adapt by providing timely and compelling offers to maintain their interest.

Matthew emphasizes the critical need for alignment between marketing and risk functions. Mismatches can lead to inefficiencies, where potential customers are targeted but not onboarded due to risk policies. By syncing these functions, companies can streamline their processes and improve overall customer experience.

The discussion also delves into the role of emerging data sources and AI in enhancing decision-making. Matthew highlights that while data and technology are important, the blend of human expertise remains crucial. He further touches on the importance of financial inclusion and understanding consumer behavior to better serve diverse markets.

Guest-at-a-Glance

Key Insights

• Consumer Choice Revolution
  The power of choice has dramatically shifted to consumers, particularly during and after the pandemic. With the ability to make financial decisions comfortably from their homes, consumers now demand swift, compelling offers from businesses. If businesses fail to meet these expectations, consumers can easily seek alternatives, often with just a few clicks. This shift necessitates businesses to remain agile and responsive, tailoring their marketing strategies to capture and retain consumer interest. It also underscores the importance of delivering personalized experiences that meet the unique needs and desires of each consumer. By understanding this new reality, businesses can innovate and refine their approaches to remain competitive in an increasingly consumer-driven market.
• Aligning Marketing and Risk
  The synergy between marketing and risk management is crucial for business success. Marketing aims to attract new customers, but without alignment with risk strategies, this effort can become futile if the incoming customers don’t align with risk policies. It’s essential for these two functions to work closely together, ensuring that marketing efforts are reinforced by a robust risk assessment framework. This integration minimizes inefficiencies and improves the onboarding process, leading to better customer experiences and business outcomes. Companies must leverage shared data and strategies to ensure alignment, enabling them to more effectively match targeted consumer profiles with their risk appetite.
• Harnessing Alternative Data and AI
  The role of alternative data and AI in shaping risk management and marketing strategies is becoming increasingly significant. By utilizing cash flow data and other non-traditional data sources, businesses can gain a deeper understanding of consumer behavior and creditworthiness. These insights help in tailoring products and services to meet consumer needs more accurately. Additionally, AI’s growing role presents an opportunity to analyze and act on data more efficiently, guiding decision-making processes. However, the human element remains vital; expertise and intuition are needed to interpret data effectively and apply it meaningfully. As businesses adopt these technologies, they must maintain a balance between technological advancements and human insight to optimize their strategies.

Episode Highlights

Exploring New Ventures and Entrepreneurship
Timestamp: [00:03:00]

Matthew discusses his entrepreneurial journey, highlighting his new venture, OGMA Risk and Analytics. He shares the inspiration behind the name, ties it to his Irish heritage, and outlines the company’s focus areas. Matthew’s venture provides risk management and analytic consulting, particularly in the credit union, fintech, and lending institution spaces. This broad spectrum of services ranges from risk assessments and custom model building to incorporating alternative data into risk strategies. The goal is to help clients navigate the current financial landscape effectively, using a deep well of analytics and expert insights.

“This is not my first foray in entrepreneurship. The company is called OGMA Risk and Analytics. It’s the Celtic god of knowledge and language. We provide risk management and analytic consulting, really focused initially in the credit union and community financial institution space, the fintech space, buy now, pay later, credit builder, and even more traditional lending institutions.”

Data Integration in Decision-Making
Timestamp: [00:06:00]

The episode touches on integrating new data types into decision-making processes for marketing and risk management. Matthew shares insights into evaluating niche data sources, such as short-term lending and utility payment data, which help build a detailed consumer profile. This integration offers a deeper understanding of a consumer’s financial obligations and payment behaviors, going beyond traditional credit data. With marketers needing an expanded data stack, this insight becomes even more critical in attracting and retaining consumers. The discussion emphasizes the importance of these data sources in understanding consumer creditworthiness and improving financial product offerings.

“There are so many options today and I can do it from my smartphone, right? Which is kind of mind-blowing when you think about it. Like, I can secure a $50,000 loan from a FinTech in like 10 minutes. As we shift to open banking, it’s going to continue to create that power shift for consumers.”

Payment Hierarchy and Consumer Prioritization
Timestamp: [00:10:00]

Matthew delves into the payment hierarchy, explaining how consumers prioritize their monthly financial obligations. This hierarchy changes based on economic conditions, like recessions or pandemics, affecting decisions on what bills to pay first. By adding alternative data into the mix, the anticipation is that consumer prioritization will be more accurately captured. This understanding aids financial services in assessing consumer risk and designing more suited products. It also highlights the importance of ongoing analysis to adapt strategies in response to changing consumer behaviors and economic climates.

“One of the kind of analyses we did pretty frequently was around the payment hierarchy, right? And so, understanding how a consumer prioritizes the bills that they have to pay. During the pandemic, we had a shift where consumers are paying their mortgage first because they had to keep the roof over their head.”

The Future of AI in Marketing and Risk
Timestamp: [00:23:00]

The conversation moves towards the prospective role of AI in both risk management and marketing fields. Matthew emphasizes the potential of AI and machine learning in streamlining decision-making processes, allowing for more efficient data analysis and application. However, he advises a cautious approach, balancing technological advancements with human judgment and expertise. This balance ensures AI tools do not replace but complement human decision-making. Companies are encouraged to leverage AI for data processing and predictive analytics, retaining the art of human understanding and personalization in customer interaction.

“An area for me that’s kind of really of interest is how to best leverage AI. I’m wondering how can I now leverage technology to help make decisions. I do think it’s important, and part of my goal was to really still have the blend of art and science.”

Top Quotes

[00:00:17] Matthew Komos: Now the consumer basically, at their fingertips, can say, “Hey, if you’re not going to provide me with a compelling offer in a short amount of time, I’m going to go elsewhere.”

[00:06:15] Matthew Komos: It’s interesting, because there’s always this new data coming up. It’s becoming kind of like, “I want it in my tech stack. I’m not sure if it’s valuable, but get it added.”

[00:07:06] Matthew Komos: At the end of the day, what you’re trying to really do is build a holistic view of the consumer. The core credit data is just one insight into the debt obligations they have.

[00:13:05] Matthew Komos: Having that symbiotic relationship [between marketing and risk] and ensuring that there’s alignment between who you’re bringing in the door and ultimately who you’re booking is really important.

[00:20:02] Matthew Komos: Transparency, especially as there’s more and more data being added to the ecosystem. People want to understand what this data means and how to source it.

[00:24:02] Matthew Komos: An area for me that is really of interest is how to best leverage AI, because AI is everywhere, and we’re not getting away from it, but there’s still a lot of unknown.