CHAPTER 1
Keep Up with Your Quants
by Thomas H. Davenport
“I don’t know why we didn’t get the mortgages off our books,” a senior quantitative analyst at a large U.S. bank told me a few years ago. “I had a model strongly indicating that a lot of them wouldn’t be repaid, and I sent it to the head of our mortgage business.”
When I asked the leader of the mortgage business why he’d ignored the advice, he said, “If the analyst showed me a model, it wasn’t in terms I could make sense of. I didn’t even know his group was working on repayment probabilities.” The bank ended up losing billions in bad loans.
We live in an era of big data. Whether you work in financial services, consumer goods, travel and transportation, or industrial products, analytics ...
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