Osama Bin Laden as an inspiration for the financial services industry (FSI) — or is it the other way round? Osama bin Laden may have been killing or inspiring people to kill for a long while, but he hit the headlines only on September 11, 2001. The FSI has been ‘killing’ customers for decades and the headlines are way off. Osama says, turn kills into political leverage; the FSI says, turn clients into ‘kills’. Osama rules over our minds through fear; the FSI rules over our money by FUD (fear-uncertainty-doubt).Last week, five executives in the Lucknow office of India’s largest private insurance company — ICICI Prudential Life Insurance — found themselves in jail. Yet they were only doing a job that the fund- and the FUD-raising industry demanded of them. Within the FUD framework, they were perhaps attempting a little creativity. By launching ‘Mission Jehad’, putting up Osama posters and strewing toy AK-47s around, they were trying to bring fun and perhaps a higher level of motivation into their three-day workshop for insurance agents.But why blame them for what is gradually becoming an industry norm? The problem is not what company executives did. The problem is the attitude, the approach, the tactics of a handful of aggressive financial services companies in markets like India’s that have just about opened up and where consumers are a long way off from understanding their rights or needs. In a race for revenues that’s slowly becoming unbridled and crossing the line dividing services and ‘kills’, there’s a new swagger, a new style, a new aggression in the air.And a new lingo. Where one of the keywords is: Kill. It works like this:The heads of insurance companies, banks, mutual funds or a distribution house are given an annual ‘target’. To reach this target, they need to make ‘revenue kills’, getting customers to buy their products, each such target being termed a ‘kill’. If they meet this target, they get a hefty bonus, often a multiple zof their salaries. This annual target then gets broken down into quarterly and monthly targets and dispersed across all branches.When these targets fall short, and often even when they don’t, thrusting products down our throats begins — needless churning in mutual funds, selling investments in the garb of insurance, selling a product that offers the highest commission than what the ‘valued customer’ needs and so on. Part of that blame is ours for letting them do this to us, trusting them blindly.But the other part of the blame is the industry that is increasingly using FUD as a sales tool. Fear creation — you may die tomorrow, so buy life cover for your family today. Uncertainty illustration — you have a stressful lifestyle, what happens if you get a heart attack, you need medical insurance today. Doubt conception — are you really sure you’ll be able to send your daughter to Harvard 15 years from now, or will she have to make do with a local law college; buy a mutual fund today. Basically, kal ho na ho.If getting our money to increase their corpus is a ‘kill’ and if fear-uncertainty-doubt is the tool to get that ‘kill’, how is it any different from tactics employed by Osama bin Laden? A few players’ race for revenues, assets or marketshare seems to be redefining industry practices and diluting the cornerstone of all such trust-based transactions: ethics. Today, these unhealthy practices are limited to insurance and mutual funds; tomorrow, it will be pensions.About time the industry came up with a self-regulating solution — and we’re not talking about a change in language here, but its approach to selling. The handful of over-aggressive companies using FUD tactics to fool financially-illiterate consumers into buying products need to change the way they function, and that change should be self-governed.But if this doesn’t happen, regulators must move in.Tailpiece: A recent report by HSBC shows that every Indian over 60 expects to “rely upon children for care in old age” While we don’t know how these socio-economic stakes will play out, the report shows that only 19 per cent — the lowest among 10 countries including the US, China and Brazil — of those surveyed felt caring for elderly relatives was a “serious concern”. The numbers is small, but even that figure is large enough for us to begin retirement planning.
