Dressed in lab coats, over 150 professionals from financial service industries gathered at the Art Gallery of Ontario for the BEworks Summit for Science in Financial Services. The inaugural event focused on the importance and utility of adopting scientific thinking in financial services institutions.
The art gallery provided an inspiring and maze-like backdrop for a day full of learning and insights. kyu helped support the event as a sponsor, and invited both staff and their clients to from companies across the collective to attend.
Highlighting the event were keynotes by BEworks co-founders Kelly Peters and Dan Ariely. As the closing keynote, Dan Ariely’s talk focused on rational thinking, and the degrees to which an understanding of human rationality can enable us to help others make better decisions.
Kelly Peters presented her keynote on the application of behavioral science for large-scale behavioral change in financial services. She touched on personal projects where she had seen quantifiable results and highlighted the necessity of experimentation to challenge generally accepted practices.
Engaging an audience of primarily financial services professionals, the speakers at the Summit shared advice and information that combined behavioral economics with financial services, primarily focusing on client behavior and company-client interactions.
Discussing ways to circumvent client misjudgment, some speakers discussed ways in which clients can be out of touch with their true financial situation. This can lead them to poor decision making for the long term, but by knowing what to look for, financial service providers can proactively help clients plan better financially.
For example, lightening talks with Chuck Howard, Michelle Hilscher, and David Lewis (BEworks’ newly appointed Chief Client Officer), addressed the variety of ways clients can fall into poor decision-making patterns. Chuck spoke about his personal work surrounding the causes and consequences of consumer financial misprediction, as well as sharing his ideas to improve customers’ prediction accuracy.
Michelle discussed habits and drivers of financial decision making. Covering a range of ways that consumers can make misguided choices, she highlighted issues like the “goldilocks effect,” where people will choose the option in the middle when making decisions, because it feels neither too risky nor too conservative.
David shared his insights on why people frequently fail to seek financial advice. According to him, consumers can have irrational opinions about their financial literacy, such as thinking they know more than they do. As a result they do not ask for advice when they should.
Continuing with a theme of improving financial decision-making, Hal Hershfield focused on how connecting people with their “future selves” can enable effective decision-making. According to Hal, when people are considering their “future selves,” they tend to feel a similar connection as if they were talking about someone else. In order to ensure that people make responsible financial decisions for their future, it is critical to connect them to their future selves and feel a sense of obligation or support for that self. By bridging the gap, they are then set up for better financial planning decisions.
To highlight the practicality of behavioral science in financial services, Jan De Silva, President and CEO of the Toronto Region Board of trade, moderated a panel with BEworks Co-Founders Kelly Peters, Dan Ariely, and Nina Mažar. Their discussion focused on the real-world applications of behavioral science, and the importance and utility of adopting scientific thinking in financial services institutions.
Nina Mažar, for instance, expanded on one tangible way that behavioral economics can help solve wide-spread financial challenges. She presented a BEworks case study on how to best leverage behavioral economics to reduce credit card delinquency. She discussed a range of options, such as implementing a variety of automated phone calls and a variance in messaging, which can encourage increased payments among customers.
The Summit concluded with an opportunity for attendees to mingle with speakers and view current research presentations. Everyone was given the opportunity to wind down after an informative day, and digest and debate the new information learned about the impact potential of behavioral economics in financial services.
“The Summit was a great showcase of behavioral economics, an opportunity for BEworks to own its place in the practice, a fascinating topic, an enjoyable group, and an army of BEworks people manning the space,” commented Infrared CEO Robin Rusch, who also attended the event. “Overall it was a great event – a meaningful use of a day.”
Photo courtesy of BEworks