Creating a risk scoring framework leveraging NLP

In our previous blog, we discussed the challenges organizations face trying to gain insight into their stakeholder environment. In this blog, we tell you more about how technology can help organizations with large portfolios stay informed. More specifically, we dive into Natural Language Processing (NLP) and share how the Owlin platform helps organizations create a risk-scoring framework. 

How does Natural Language Processing work?

The latest techniques in NLP give computers an almost human-level understanding of written texts and can deploy that understanding at a much larger scale and higher speed than any single human analyst. Therefore, NLP techniques vastly increase the amount of data that can be analyzed in close to real-time. What’s more, one can create NLP pipelines that classify a wide range of topics and signals relevant to any given field.  

How does Owlin create a risk scoring framework leveraging NLP?

NLP pipelines allow companies to create a scoring framework and extract much more value from large amounts of data. Owlin’s advanced NLP pipeline analyzes over 500,000 articles every day, in sixteen languages from all around the world. Moreover, the technology works to extract value judgments from these articles, aggregating data insights into a set of readily interpretable scores that reflect the levels of risk across a wide range of relevant categories. The scoring module is powered by a powerful, custom-built parsing engine, which is able to turn a wide array of signals, found across worldwide news, into a single risk or opportunity score.

Industries that leverage Owlin to make better informed decisions

Clearly, the value of the NLP approach stretches across industries. For example, finance firms may wish to monitor their investment portfolios, and stay up to date with developments that may affect the risk associated with portfolio companies. The portfolio can also be ranked based on different types of risk – such as financial, legal, operational, or ESG factors. However, Owlin’s NLP pipeline covers a wide range of subject matters, and is able to detect many different types of risks and opportunities. This can help firms in a variety of industries make informed strategic decisions.

Manage and use data in a more time-efficient, effective, and comprehensive way

Having trustworthy scores is much more user-friendly than having to search the internet for information manually. A straightforward data score is also a useful starting point for further enquiries. Looking at the investment portfolio use case again, companies with scores suggesting higher financial risk would be the entities deserving the most attention. Analysts could assume, with a high degree of confidence, that those with good scores remain healthy investments – and therefore focus their energy and resources more on those that do not. This could involve delving into all the news insights and data in more depth, helping the firm to come up with a better investment strategy going forward. In other words, data scoring offers quick and easy insight that allows companies to manage their time and resources much more efficiently – ultimately contributing to better performance and higher profitability.

Further reading

How do you know if NLP technology will give you better insights? Check out our blog ‘Does NLP do a better job than the human alternative?’ in which we share our views on the topic of trusting technology for risk and market insights.

Questions? Contact us!

At Owlin, we are always looking for ways to help companies structure news and integrate risk insights into daily workflows. Curious to find out what we can do for you? Contact us!

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