Joel Blake OBE, Founder and Chief Executive of the GFA Exchange, discusses the importance of diversity of data in tomorrow’s business world.

Data, diversity, and digital technologies in combination will play a crucial role in boosting inclusion in a post coronavirus world.

It is what Joel Blake OBE calls “the triple D effect.” He says: “With better diversity of data, you can generate a richer and diverse level of intelligence that, when applied with innovative digital technologies, will scale your solutions. Thus, providing long-term sustainable business models.”

Explaining the importance of diversity of data, he cites financial services that traditionally focus on credit information and historical analysis of portfolio non-performance. Its methods include some bias.

“Often, the data used in financial services to drive decision-making is non-diverse,” Blake argues. “The same data sources that everybody else uses enables a level of groupthink in the industry, where they cherry-pick what they believe will be a viable business to include in their portfolio based on a narrow set of criteria relevant to their own business needs.

“I believe having a portfolio made up of diverse businesses run by people from diverse backgrounds is fairer and more inclusive and representative of society. But, by having the diversity of data which involves combining all the business health and performance information gained from those individual businesses in your portfolio, you understand better the ecosystem they are all a part of and how they are positioned to survive within it– fuelled by the real-life insight of their collective journeys.

“Hence, your collective use of inclusive intelligence goes up, as your insights will highlight differences and unique trends that were previously hidden. This gives you better confidence to take more risks and diversify your client base. In a post-COVID world, where you need to have a deeper insight of who is best suited to your business for the future, that’s going to be super important.”

Fair access to finance

Joel is the Founder and Chief Executive of the GFA Exchange, aiming to make business support and enterprise more inclusive. It was initially set up as a fintech platform to help “businesses that lenders have already said ‘no’ to, who should have received a ‘yes’.” In other words, sections of the community that were not getting fair access to finance.

GFA launched in February 2020, and a month later, the whole financial services industry was disrupted by the lockdown. Blake gambled on the Government stepping in to provide financial lending support for businesses and recognised that there would be unsustainability in the market when repayment plans started kicking in.

He looked to provide an automated service to help lenders understand what a good business looks like within their existing portfolio and, from a post-lending perspective, how using diversity of data, it could reduce the risk of future bad debt.

“We have built an intelligent portfolio risk platform which analyses all the businesses in a client portfolio, benchmarks their performance against each other using unique growth KPIs and tells you which are likely to grow or not and gives you the intelligence as to why.

“When we return to business normal, many lenders may revert to their usual lending profiles. Functionality in our product allows a lender to trade the intelligence that they have on businesses they no longer want to work with, with other lenders.”

Making more informed decisions

Although there are other portfolio risk solutions in the market, GFA stands out from the crowd because it does not use third-party data sources. Instead, all intelligence generated comes directly from the customer of the lending partner.

“Data is based around 30 questions within GFA’s growth algorithm. These cover everything from when a company was founded, the sector it is based in, staff turnover, supplier’s days and individual growth strategies, and much more! It gives the lender a deeper insight into what a business needs to grow.

“Each lender receives a quarterly report detailing all the elements they should be looking for to find good-performing businesses that suit their profile, with less emphasis on credit risk. The aim is to help lenders make more informed decisions. GFA also benchmarks the performance of a lender and their portfolio, and against those of other lenders in the market, providing an additional market perspective.”

Blake accepts that some diverse businesses find it difficult to get funding and makes the point that “you can’t come to a big lender asking for big money with a small ambition.” His advice is to take time to carry out research, make sure the business case is solid, that internal paperwork is up to scratch, and be willing to ask for support.

To help those struggling, he co-founded a programme last year to support 50 Black and ethnic minority businesses in building their capacity and applying for contracts from local authorities, the Commonwealth Games, HS2, and other big projects.

“We got them into a peer-to-peer model where they could share challenges and learn from each other in a safe and comfortable environment,” Blake reveals. “Then we wrapped that up with ten masterclasses, led by industry professionals so that they could understand what they need to do to get the support they’re looking for.”

Accepting difference

He firmly believes that society will become much more technologically and data-driven in the years to come. It would also be a world in which diversity and inclusion is no longer just a conversation but the foundation for positive impact.

Blake believes that COVID-19, the Black Lives Matter movement, the US presidential campaign, and Brexit have brought diversity to the fore, with organisations feeling more confident about discussing it.

“By its very nature, diversity and inclusion will force itself to be a key strategic driver,” Blake predicts. “Because, whatever you class as the new normal will be disrupted by the data and level of diversity in the market, regardless of what market you’re in. I think in five years, we will be a much more agile and flexible world because traditional and conservative approaches will become obsolete.”

He adds that the notion of ‘diversity’ will be redundant as difference becomes more accepted, rather than putting labels on people.

“That, for me, is why diversity of data is so important. If you have the right information about the widest and diverse range of people and use it in an inclusive manner, it informs the State whether everyone is feeling included and having their needs met.

“And that’s where digital technologies can accelerate that work as you look at ways to add value at less cost. I am getting increasingly frustrated talking about diversity because it’s like we need to put it into a box. We are all different, even when we look the same, so the box is irrelevant.”