“MoneyBall for FP&A”: Maura Feddersen on Winning in Forecasts

  Maura Feddersen, behavioral research manager at Swiss Re, is an economist who previously worked in the economics team of two of the Big Four Accountancy firms: PwC and KPMG.   She got switched on to behavioral economics as “I always felt there was something a bit missing in economics. [Economics] assumes that people act quite rationally…and that was just not the case. Behavioral economics brings together the economics, as well as insights from psychology, to try to assess how humans really make decisions”.   This  fascinating episode with Maura, uncovers the lessons that FP&A teams can learn from behavioral economics to improve forecasting and the power of “knowing what knowing what you don’t know.”   This episode includes      New research revealing that investors predictions are only slightly more accurate than a chimp How new forecasting methods improved accuracy at Swiss Re by 5% The cognitive biases we need to be aware of that undermine accuracy (such as the dangers of groupthink) Meryl Streep’s Oscar nominations and your forecast confidence levels tested  How to try and manage cognitive bias The true economic impact of uncertainty in the global economy and in your business  The opportunities and limits of AI forecasting  Using RIO (Rational Impartial Observers) The biggest failure in her career Favorite Excel function Her biggest advice for someone starting out to get really good at forecasting    Further reading    Actuaries magazine: So You Think You Can Underwrite [Maura Fedderson]    Insurers, take heed of these 3 common forecasting fallacies [by Maura Feddersen]    Recommended books   Superforecasting: The Art and Science of Prediction Paperback - Philip Tetlock, Dan GardnerNassim Taleb, The Black Swan, the Impact of the Highly Improbable    Annie Duke, How to decide   Adam Grant, Think Again, The Power of Knowing what you Don’t Know    Daniel Kahneman, Olivier Sibony, Cass R. Sunstein, Noise: A Flaw in Human Judgment   Read the full transcript and blog Follow Maura Fedderson on LinkedIn YouTube video Follow Paul Barnhurst on LinkedIn   Follow Datarails on LinkedIn   FP&A Today is brought to you by Datarails.   Datarails is the financial planning and analysis platform that automates data consolidation, reporting and planning, while enabling finance teams to continue using their own Excel spreadsheets and financial models.   Get in touch at www.datarails.com   For AFP FP&A Continuing Education credit please complete the course via the Earmark Ap, must pass the quiz with 80% accuracy and send the completed certificate to [email protected] for issuance of 1 hour of credit toward your AFP FP&A Certification.