Let’s talk about decision making and “own goals,” aka apparently self-sabotaging behaviour.
Making a decision that is not in your own best interests is painful and potential embarrassing, just like the own goals scored in big football tournaments by players such as Mario Mandzukic in the 2018 World Cup Final and more recently Slovakia’s goalie, Martin Dubravka, in a Euro 2020 match against Spain.
If you are a director or senior manager in the financial services industry, you are well acquainted with the frustrations of self-sabotaging behaviours by customers.
These include:
- Premature encashment of funds/products which are performing within previously agreed parameters.
- Selling low and re-investing when the market improves.
- Incurring needless costs by switching between funds or products for no strategically logical reason.
These inevitably result in dissatisfied or disappearing customers, who have lost money through their own actions.
They also lead to increased costs to financial services providers (e.g. in your staff taking calls from panicked customers and “talking them down off the ledge”- or failing to do so); reduced customer retention (customers leaving your product or platform for reasons which do not seem to serve them, as opposed to those who rightly chose to go because you have not met their legitimate requirements); and ultimately reduced profits (due to the aforementioned increased costs and lost business).
What to do?
By providing your financial services customers with access to Wi-Ai’s behavioural finance software tools, you can empower them to make better decisions about your products by understanding the behavioural biases that may be influencing their decision making, such as:
- Recency Bias
- Optimism Bias
- Loss Aversion
- Anchoring Bias
Ultimately, we aim to help your customers take ownership of their decision-making power and thus make choices which are profitable for them- and for you.
We can’t do anything for the unfortunate Martin Dubravka. However, if you want to know more about how we can help your customers overcome self-sabotaging behaviour, get in touch at [email protected]
Image: Slovakia’s goal-keeper Martin Dubravka scores own goal against Spain (AP: David Ramos)