mathbabe

A few days ago I wrote about the idea of having a quant group working for consumers rather than against them. Today I wanted to spell out a few things I think that group could do.

The way I see it, there’s this whole revolution of data and technology and modeling going on right now, but only people with enough dough to pay for the quants are actually actively benefiting from the revolution. So people in finance, obviously, but also internet advertising companies.

The problem with this, besides the lopsidedness of it all, is that the actual models being used are for the most part predatory rather than helpful to the average person.

In other words, most models are answering question of the form:

1. how can we get you to spend money you don’t necessarily want to spend? or
2. how good a credit risk are you? or
3. how likely are you to come back and spend more money? or
4. how can we anticipate the market responding to end-of-month accounting shenanigans? I just threw this one in to give people a sense of how finance models work.

It all makes sense: these are businesses that are essentially bloodthirsty, making their money off your clicks and purchases. They are not going away.

Then there are some models that are already out there trying to make the user experience more enjoyable. They answer questions of the form:

1. If you like that, what else may you like? (Pandora, Netflix, Google)
2. If you bought that last week, maybe you’d like to buy it again this week?
3. If you bought that, maybe you’d like to buy this now?

The problem, as you can see, is that these second, helpfulish kinds of things quickly devolve into the first, predatory kinds of things. In other words, you’re being bombarded by ads and suggestions for spending more money than you actually want to spend.

What about stuff that you actually don’t want to do but that is probably not directly profitable to anyone? I’d love to see technology used to tackle some of these chores:

1. Figuring out what the best deal is on loans (credit card, student loans or mortgages), without becoming a lawyer. Here I’m not just saying they should all be clear about their terms- that’s a job for the CFPB. I mean there should be a website that asks me a few questions about what I need a loan for and points me to the best deal available.
2. Finding the best price for something. I discussed this briefly here.
3. Warnings about weird conditions and agreements, like mandatory arbitration.
4. Help finding a good doctor or a good plumber etc.
5. Help knowing when to go to the DMV or other public services building so the lines are bearable, or even better a way to do stuff on your computer or phone and avoid the trip altogether.
6. Getting your kids’ medical records to their schools and camps safely and efficiently.

Some of these things already exist (like the doctor thing) but aren’t well-known or well-publicized, so wouldn’t it be cool if this quant group also provided an app that would aggregate all these services into one place?

And for the things like #4, where you want to be warned before you buy, it’s too much work to go back to a webpage to check everything before buying. Instead, the app could follow you around the web when you’re shopping and overlay a “bullshit warning” icon on the potential purchase in situations where people have complained about unreasonable terms and conditions.

Let’s use technology in our favor. Instead of the companies collecting information about us, let’s collect information about them. Come to think of it, the CFPB should start this quant group today.