Cayman and lazy confirmation bias

Confirmation Bias

So, as I’ve written about lately, I’m currently looking to buy a house in the London area. I was all set this week to get a mortgage from my bank here in the UK as I “ticked all the boxes” in their words.

One last step, though, was that they had to check if it was ok with the bank risk underwriters that my income comes from my Cayman Islands company. This was nothing to do with the nature of income, they had already reviewed my Cayman corporate documents and tax filings in the UK. No, this was simply about the country the income coming from being the Cayman Islands.

You guessed right, the answer was “computer says no” to Cayman.

Let’s talk about why, and why it was due to Confirmation Bias.

So, after being turned down, I then spoke further with the friendly and highly professional mortgage specialist. I asked them to check if they would have turned me down if I lived in a very similar offshore finance jurisdiction (Jersey) with all the same circumstances. The answer was: “yes, Jersey would be fine”.

We then thought to eliminate this being about a USD vs GBP currency of income issue, so checked again if there would be an issue if I was from the USA and all circumstances again the same. The answer was: “yes, the USA would be fine”.

All in all, there was no reason at all why I would be told “no” due to me being Caymanian and owning a Cayman Islands business, from which I derive income that would pay the mortgage.

However, as with the photo from a famous (in the UK) old comedy show meme, “computer says no” was the end of the story, as to look at this was way above their “pay grade” (in their words).

So, what happened at the higher pay grade?

If you are not a Cayman expert and I say “Cayman Islands” to you, I can guarantee that 9 out of 10 people have a negative inference. Something like “tax haven” and inferences in there of “dodgy” behaviour. However, do the absolute minimum of research and you will see clearly that Cayman is uber-compliant with global rules, treaties, transparency etc etc.

So, again, why did this global retail bank “block” me because I am from Cayman? Simple. Laziness, but more specifically, Confirmation Bias, which is where: “we place extra value on evidence consistent with our favoured belief. Sometimes when a diagnosis is made in a patient, we may ignore signs and symptoms that do not confirm our working diagnosis.”

Confirmation Bias is one of the numerous types of Cognitive Biases or Heuristics (mental shortcuts) that formed the core of the work of Kahnemann and Tversky.

As regular readers know, I also write about anti-racism, gender bias. In fact, anything that triggers my core value of FAIR.

Last year I wrote a long read on bias and heuristics, called: “You cannot eliminate your biases“. We are all biased, so I encourage us all to read or re-read that post.

I wish that whoever at the bank (which yes, bills itself as the “global bank” and has a name featuring four initials) chose to block cayman actually took some time to recognise their own biases before doing so. By being lazy and using confirmation bias, this has not only hurt me as a customer, but lazy selection like this is not of service to the bank itself.

Ah well, “it is what it is”, I guess! (but I do still always wish that people would do what they can to be fair).

Also published on Medium.