THE BLOG
12/15/2015 01:40 pm ET Updated Dec 06, 2017

Future Smart Banking is Mindful

The worst enemy of the investor is most likely himself. When I came across Daniel Kahnememan's book "Thinking Fast & Slow", a wide range of experts from different fields came to mind, like Ernst Fehr or Robert Shiller. Together with my friend Moni Koch I went to Lucerne for a conversation with Andy Habermacher, who explained to me what biases are and that he and his team coach managers from financial institutions on how to avoid them. Later on I got the opportunity to work with Prof. Juergen Huber from university of Innsbruck. Under his guidance I collected all existing biases and investigated where and how they are applied in the banking industry. After going through the list of all known human biases, the recognition of human's illusion of control becomes strong. It is like reading about possible illnesses and thinking being ill as well, one will confirm each bias in oneself.

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During an extended research I found a number of ways and means that describe how to avoid any kind of bias. One golden rule is to develop a state of calmness when making a decision. Can technology like smartphone support humans to become mindful and calm? Would it be an advantage to have a smartphone available whenever necessary and to just press a button to eliminate emotions so that our brain can function properly?

I think the combination of psychology in finance with the developments of intelligent technologies and the value of creativity and mindfulness as one of the missing ingredients to meet the transformative challenges in the financial sector. There are a number of unwritten rules in banking that one needs to follow in order to be successful in managing projects, innovations or people. For example, as a project manager, most of the time we are avoiding the usage of terms such as biases, creativity or mindfulness in order to avoid fooling ourselves.

An important innovation of modern banking is the implementation of state-of-the-art technology and the usage of big data. In day-to-day banking the usual practice is to look 'inside the box' and search for solutions to keep clients satisfied while it's being missed sometimes to take a client's perspective to understand what's on their mind apart from banking matters and what can be contributed to make their life more comfortable. The usage of big data can also be used to better understand clients and to support them better. In the end we trust more financial institutions which are also providing non-profit services to their clients or employees, as we like to give them more credit, no matter how their advertising campaigns are. Amazon