Debiasing Business Decision Making applying Advanced Analytics
24/05/2018 11:20 - 11:40
Few industries have subjected their investment decision-making processes to more scrutiny than asset management, yet biases still affect many high-value decisions throughout the lifecycle of individual funds.
Leading asset management organizations are becoming increasingly alert to the impact of decision-making biases on fund performance too. A few have adopted an innovative approach to diagnosing bias and its drivers. Working with analytics experts and behavioral scientists, they have applied machine-learning algorithms to their own historical data and discovered clusters of suboptimal investment decisions. Having examined these decisions more closely, they have detected signs of consistent bias in the processes by which the decisions were reached.
Working to overcome the effect these biases have on performance have given these leaders a competitive edge over their peers, while significantly improving the value proposition for active funds.
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