Banks do not focus on customers, says OFT chief – New Model Adviser®


Rather, the problem is that they view customers as a “means to an end” – a common complaint about firms across Financial Services!

The “shift”, that has taken place over many years, and accelerated courtesy of “light-touch Regulation”, saw the focus move from responsible lending to misrepresenting debt as credit and widespread mis-selling at every scale:

Earning loyalty and trust by serving customers with products that added value is a long, slow, process – stable and sustainable (win/win).

Chasing and retaining market share, based upon indebtedness and inertia is cheap and fast – fragile, volatile and unsustainable (lose/win).

Fingleton said that the financial crisis has worsened the situation and that concentration had increased across most banking markets.

‘At the heart of the concerns about these markets is a lack of ‘customer focus’ on the part of providers,’ he said. ‘We still have a banking sector where competition is manifestly not working well for consumers.’

He warned that ‘if we do not see real change from banks, then a more radical approach needs to be considered.’

via Banks do not focus on customers, says OFT chief – New Model Adviser®.

SMEs entering 2012 with mixed emotion – AXA Commercial Lines


This is particularly bad news for “a nation of shopkeepers” and a damning indictment of the strategies adopted by insurers and brokers alike!

Instead of incentivising and rewarding a culture of loss prevention, which serves EVERYONE well, the insurance industry sold themselves and their customers short in its indecent haste to satisfy their own, short term, financial goals. And the insurance industry “knows” about tail risk!!!

Who actually benefits from buying “risk protection”? Please take a look at some of the “related articles” below and consider whether businessno-trust-300x225 owners who have access to unprecedented amounts of information on a wide range of “risk” subjects are, generally, more “stupid” or just particularly poorly served and advised!?

“When it comes to the fortunes of the UK’s SMEs, there is a more complex picture out there than the headlines would lead us to believe. It’s not all doom and gloom for sure. However there is a real need for valuable advice when it comes to risk management given the fact that, when asked to identify key risks facing their business, nearly a quarter of UK SMEs (23%) couldn’t name a single one. I find this quite staggering. In my view it means that brokers have a major role to play in helping their clients to both understand the risks their businesses face during these difficult times as well as manage them.”

via SMEs entering 2012 with mixed emotion says AXA Commercial Lines.

Ontonix “compass”:: for the long and winding road to enlightenment


…a growing minority of business/managerial economists consider Taylorist scientific management (which has made it to the present day through various mutations and enrichments) as still plagued by extreme mechanism and unaware of the lessons coming from complexity science (deterministic chaos, emergent behavior): they therefore believe that it should be replaced with models inspired by non-linear dynamical systems, non-equilibrium thermodynamics, agent-based simulations and other modern “complex” tools

via The long and winding road to: Enlightenment? (via Stupor Complexus) « Get "fit for randomness" [with Ontonix UK].

M.A.D.: The $600 Trillion Time Bomb – Money Morning


My learned colleagues, at Ontonix, recently undertook the task of analysing over 600 macro-economic  parameters from the World Bank for the period from 1970 to 2010 and posed the question: “how much globalisation can the World afford”?

This may seem to be a curious course for a firm whose Founder and CTO is quick to quote Zadeh’s Principle of Incompatibility but should be viewed in the context of a genuine desire to “educate and inform”…and, of course, to showcase Ontonix capabilities!

Read on because “high precision” may not be required. A rough idea of the numbers and the implications should suffice! Read more of this post

PwC:: insurance companies must adapt to changing market dynamics – Insurance Age


PwC insuranceI could not agree more with these words of wisdom from David Law. This isn’t the first time that PwC have tried to warn the industry about the need to “evolve” for survival in a rapidly changing risk environment.

Contrary to what some would have you believe, the lack of innovation – of the “creative destruction” variety – as evidenced in self-similar operations, culture, products, etc. IS all the confirmation that one should need to establish that “risk businesses” are still intent upon looking at the past for answers about the future instead of scanning their own risk horizon and creating resilient strategies for uncertainty!

risk horizonDavid Law, global insurance leader at PwC, said: “The immediate pressures of market volatility and regulatory upheaval have left little space in boardroom agendas for insurers to think about how to remain competitive in the years ahead. It is vital insurers do not get blinded by the current challenges and set a clear vision for the future.

“Growth opportunities exist, particularly in faster growing economies and from new technology developments, and those insurers that are able to respond to this changing risk landscape with innovative solutions will be rewarded by the way they are valued by customers and investors.”

He added: “Insurers who are too slow to respond to the changing market dynamics could find themselves on the back foot competitively and struggling to secure sufficient capital.

via Pwc: companies must adapt to changing market dynamics Insurance Age.