CMRC work with business and government, informing practice and policy

AI and Credit Scoring: CMRC recently worked with leading consumer finance provider, Novuna Consumer Finance, to explore using Artificial Intelligence (AI) technology to make improved credit decisions for customers and safer business decisions. The team investigated and improved the performance of application credit scoring models. As Dr Marek Kacer explained, “it involved working with large consumer credit data files, replicating existing modelling techniques and developing new AI models with the objective of making better credit decisions.”

Influencing Policy: Professor Nick Wilson and Dr Marek Kacer’s research on regional equity finance gaps has been included in the 2023 Autumn Statement. The team have been working with the Department of Business and Trade and HM Treasury on a policy modelling ahead of the statement.

Their research analyses the financing requirements of potential high-growth businesses in the UK. The research quantified shortfalls in providing equity finance (venture capital and growth finance) and identified regional disparities. The analysis identified an ‘equity gap’ in the UK economy, an under-supply of around £11bn. Moreover,  there is evidence of regional disparities, businesses in the North of England and the Midlands are substantially less likely to receive equity financing than counterparts in London. The announced pension reforms are designed to increase the provision of business finance, and by addressing the equity gap, promote growth and innovation. Potential high-growth companies in the UK have a disproportionate impact on economic growth, productivity, and the innovation spillovers or disruptive technologies that have wider long-term benefits for the economy. More specifically, these businesses drive the growth and development of important new and transformative sectors (e.g., recent AI advances, clean energy, financial innovation).