For as long as I’ve been involved with financial services, it has been a truth universally acknowledged that actuaries don’t know anything about consumers. And, arising from this undeniable fact, that financial services firms led by actuaries (if the idea of actuarial leadership isn’t too much of an oxymoron) are bound to be as out of touch with consumers as it’s possible to be.
But increasingly, I wonder whether this is still true. No, don’t get me wrong, I’m not suggesting that actuaries have acquired any capability for consumer insight, or any other kind of emotional intelligence. But I am wondering whether there is now a new generation of financial services business leaders, with completely different professional skills, who are even less well equipped to enable their firms to identify and satisfy consumer wants and needs.
Who are these people and what is their skill? They are the techies, and across countless numbers of fintech start-ups t heir skill is doing brilliantly innovative and complicated things with digital processes that in one way or another will transform people’s financial lives.
If, that is, the people in question a) want their financial lives to be transformed, and b) are able to grapple with what’s required of them to achieve the transformation.
This is not some Luddite yearning for things to stay as they are, or indeed to go back to the way they were in the quill pen era. But it is a fairly strong suspicion that quite a lot of the very clever new services now on offer are simply too complicated, too demanding and require too much engagement for most of us to enjoy the benefits they offer.
Probably the best example is the whole subject of financial aggregation, a big theme than comes in many flavours. Once we bring all our finances together and start managing them as a whole, all sorts of good things become possible. We can “optimise” our financial lives in ways we never could when everything was all over the place. But will we? Do we really care? Are most of us not more likely to stick with the principle of “satisficing” – that great word invented by that great US Economist Herbert Simon to describe the way we’re willing to put time and effort into solving a problem until, and only until, we find a solution that we decide is satisfactory: as soon as we do, we’ll stop right there, even if further work would have led us to even better solutions.
Techies have an infinite capacity to engage with technology, just as actuaries have an infinite capacity to engage with financial systems. These exceptional levels of engagement are what make these people important, special and valuable. But when it comes to designing and developing things intended for ordinary, unengaged consumers, they’re also what makes them very dangerous. .