When it comes to confusing jargon and empty buzzwords, few fields are as guilty as the financial services or tech industry. When the two come together, it's a Venn diagram of awful terminology.
The problem with jargon is it makes the industry intimidating for the average person. Most people don't know what an ETF is, let alone bid-ask spreads, glide paths or basis points. It makes people feel like they need a business degree to understand investing, creating a barrier that prevents many from ever getting involved.
I know from personal experience. When I first started writing about the fintech world, it took months to wrap my head around all of the acronyms, the differences between a broker-dealer, RIAs and wirehouses, and what advisers meant by "smart beta." Heck, I'm still figuring some of it out — just look at my Twitter feed.
It's hard for me and I'm steeped in this stuff all day; imagine what it's like for everyone not involved with the industry. I'm reminded every time someone asks me about my job and I watch their eyes glaze over. Nothing ruins a first date quicker than explaining how adviser fintech innovation is shifting from back-office efficiencies to client-facing engagement.
Fintech jargon impacts advisers, too. I hear from advisers all the time who admit to feeling bewildered by all of the new tech lingo they have to learn. Thirty years managing portfolios hasn't prepared anyone for blockchain.
Granted, finance and technology are both complex topics, and there will always be some degree of sophistication required. But I believe we can make the fintech world more accessible for everyone if we all agree to kill some of the most egregious industry slang. Here are a few places to start:
1. Seamless, or frictionless, end-to-end processing
Here it is, the mother of all tech clichés. This is in no way limited to fintech — the HBO show "Silicon Valley" used this as a punchline about tech startups.
You know what technology companies really mean when they say something is "seamless or frictionless, end-to-end processing?" They mean the product works. They mean their product can accomplish the task it is supposed to, start-to-finish, without something screwing up. This phrase allows fintech companies to announce a new capability without admitting that it previously might not have worked right.
I mentioned this one on Twitter, and it elicited a lot of reactions.
You have no idea how many emails I have claiming a piece of technology is all-in-one. Here's the thing: nothing is "all-in-one." Not a thing. My iPhone can do lots of things, but it still can't make my bed in the morning, and it has way more capabilities than any adviser fintech I've seen.
But ignoring a larger metaphysical conversation about the meaning of "all-in-one," what's really going on here is that every fintech vendor wants to be the go-to product for advisers, the central hub advisers use for day-to-day work activities. Some fintech can indeed accomplish a lot, but there is no silver bullet that addresses everything in one place.
3. Machine learning
There is nothing wrong with the phrase "machine learning" in itself. The problem is that it is horribly overused by the fintech industry and almost always accurately. True machine learning is when a computer system can perform a specific task without being programmed specific instructions. Some companies are working on this, but when you hear a fintech vendor talk about machine learning, nine times out of 10 they mean "it can make predictions." The same can be said for artificial intelligence. The potential is exciting, but we are still a little ways away from true machine learning.
Again there is nothing wrong with the word "integration" per se. In fintech, it simply means one product connects with another one. What gets confusing for advisers, and me, is the wildly different definitions that fintech vendors have for the word. For some, it simply means single-sign-on. For example, you log-in to your portfolio accounting system and it also logs into your CRM.
For others, it means bi-directional data flow, which is jargon for "data from one technology can move to and from another technology." Technology vendors will boast about their new integration partners, but you have to ask for specifics to find out what the integration actually accomplishes.
Unless all relevant information from one technology is updated in real time by the other, without any manual effort required of the user, the two products aren't integrated.
It's a product, people. Yes, your technology may solve a problem. But just call it a product.