22 September 2017
John Cant

John Cant

John Cant - MPI Europe Ltd

41Posts 190,235Views 21Comments
Trends in Financial Services

Trends in Financial Services

A community to discuss the future of financial services and any other interesting trends, strategies, ideas, views.

Mine detecting bees

31 March 2009  |  4624 views  |  0

Whether it is certain bonuses in financial sector, or league tables and performance stars in the public sector, there have been numerous recent illustrations of the harm that poorly set business targets can cause.

It seems deceptively easy in theory to use targets and rewards to drive desired behaviour. Take the mine detecting bees for example. No, seriously - I know it is close to April Fools Day, but what you do is take an ordinary bee, expose it to the scent of high explosive for a short period in laboratory conditions and give it a sugary reward when it correctly identifies the scent. Then you release a sensitised swarm over a potential minefield and the bees congregate on the ground around any hidden mines. Very impressive, and potentially quite useful. So what is wrong with using the same techniques in business.

Well the key issue is that humans and the corporate minefield are significantly more complex. Humans are particularly adept at finding ways to maximise their rewards, so a simple, poorly defined target without suitable checks and balances has the potential to go badly wrong. Also there is often a temptation to concentrate on setting targets on things that are easy to measure rather than the right things – e.g. a simple revenue figure rather than a more complex, and potentially at least partly subjective, risk adjusted revenue figure. We are now seeing a greater focus on these types of target from the Turner Review and recent announcements in the US. It is a complex area that is not an MPIE speciality, but given its importance to how financial firms re-invent themselves, we are interested in speaking to firms who have experience in this area.  

* A version of this blog originally appeared in the MPI Europe monthly bulletin

a member-uploaded image TagsRisk & regulationWholesale banking

Comments: (0)

Comment on this story (membership required)

Latest posts from John

Imagine a miniature financial crime fighter in every router

16 June 2016  |  8157 views  |  0 comments | recomends Recommends 0 TagsSecurityPaymentsGroupInnovation in Financial Services

Will MiFID II bring Evolution or Revolution to investment research?

08 June 2016  |  8075 views  |  0 comments | recomends Recommends 0 TagsTrade executionRisk & regulationGroupMiFID

Fraud ain’t what it used to be

18 May 2016  |  2581 views  |  1 comments | recomends Recommends 1 TagsPaymentsInnovationGroupTrends in Financial Services

Beware the financial crime bite of the back book

26 April 2016  |  3780 views  |  0 comments | recomends Recommends 0 TagsRisk & regulationGroupTrends in Financial Services

John's profile

job title Managing Director
location London
member since 2007
Summary profile See full profile »
I lead MPI Europe a niche financial sector consulting firm focussing on regulatory driven, risk, technology and operational change

John's expertise

Member since 2004
41 posts21 comments

Who's commenting on John's posts