Predictive analytics shine light on hidden risk

How did D&B Predictive Analytics predict the insolvency of Blok Digital Solutions?

Find out how our Failure Score successfully predicted the insolvency of Blok Digital Solutions – 8 months before it occurred.

What is the D&B Failure Score? 

Having the right data powering your credit risk engine is key to making smart business decisions, especially when you are trying to identify partners who can’t pay, or won’t pay, during the current economic climate. 

The D&B Failure Score helps to do just that. It predicts the likelihood that a company will obtain relief from its creditors or cease operations over the next 12-month period. To achieve this, the Failure scorecard looks for events signalling the onset of failure, such as financial difficulties, a meeting of creditors, administrator appointed, insolvency, receiver appointed and petition for winding-up, and more.  

Interested? Let’s take a closer look at how the Failure Score was used to predict the insolvency of Blok Digital Solutions Limited.

The decline of Blok Digital Solutions Limited 

Blok Digital Solutions Ltd was registered in March 2017 and operated in the service sector. In January 2022 Blok had a Failure Score of 64 with a Recommended Credit Limit of £22,500. Blok made changes to their Board of Directors and failed to file their Accounts indicating higher risk and so the Failure Score and Recommended Credit Limit were reduced. In April the Failure Score had reduced to 10 (High Risk) and the Recommended Credit Limit had been removed. Eight months later in December 2022 Blok filed a Petition to Wind Up the business.

How does the D&B Failure Score work? 

Factual information is analysed using advanced statistical modelling techniques. The D&B Failure Score is a relative measure of risk, whereby 1 represents organisations that have the highest probability of failure and 100 the lowest. It shows how a company's risk of failure compares to other organisations within a country.

What we found: 

• At the beginning of January 2022, Blok Digital Solutions Limited had a moderate Failure Score of 64. 
• Later that month, its Failure Score was reduced to 50 – due to Blok Digital Solutions decreasing the size of its board of directors. 
• At the end of the month, Dun & Bradstreet further reduced their Failure Score to 32 – because the business was late to file their required financials. 
• In February 2022, their Failure Score reduced again, this time to 25 – mostly due to further aging of its financial information. 
• In March 2022, their Failure Score decreased further to 22, as their financial information continued aging. 
• Later that month, Blok’s Failure Score reduced to 10 when newly analysed financials presented a technically insolvent situation.
• In December 2022, D&B received notification that a petition for wind up had been filed. 
• Later that month, D&B received notification that a meeting of creditors was scheduled for 22 December 2022.       

How we can help: 

• D&B collects information from tens of thousands of sources globally. Our predictive risk scores use demographics, corporate linkage, principals, financial, trade experiences and public detrimental information to predict how an organisation is likely to behave in the future.
• Our data and predictive indicators provide our customers with accurate and timely insight that an organisation may be heading for failure.D&B's monitoring services can be used to identify key changes to an organisation, allowing our customers to take appropriate and timely action.
• Utilising the insight provided by D&B’s Predictive Indicators helps customers to quickly identify the organisations that are likely to fail or pay late, helping to drive growth, mitigate risk and increase profitability. 
• Predictive Indicators can be adjusted by authorised experts to reflect non statistical/catastrophic events. For example, news reports from trustworthy sources that indicate a material change to risk can be investigated and changes made where appropriate. We also apply expert rules (sometimes referred to as overrides) in certain situations to ensure appropriate scores.    

Keen to learn more?  

Interested in learning more about our unique industry leading scores including the Failure score and much more? D&B Finance Analytics combines powerful insights and technology to help finance teams manage risk, increase operational efficiency, and reduce costs, but if you would like to get started with a smaller number of International or European credit reports only, you can now order them online.