When gremlins attack, part II
It was a tough demo. But after the stress of the demo is gone, there’s time to debrief and polish up any aspects that went awry. Demo in haste, repent in leisure. And this is how software gets good.
I worked with Ivan and Sergey and realized that our numbers were right. The bank had been locking in 12 month CDs at 4%, but treasury rates have recently plummeted close to 3%. This brings loans from the wholesale market down to about 3.5% - and all of the 4% CDs were earning negative interest.
It takes 12 months for all of these CDs to be replaced at a lower rate. Also, the shape of the yield curve indicates it will be a while before rates come up again.
But even with the calculations working out, I still got pretty sweaty during the demo. It might not be all that different for a user looking at the same information.
We made a few subtle changes that should block surprises from this particular gremlin:
- Added a note to the user when the wholesale market changes drastically. Drastic changes only happen every few years - and the user may not easily remember the effect on profits and optimal rates.
- Displayed negative profits (instead of just cutting off the graph at zero). This leaves a constant reminder of deposit profits during the last low rate environment in 2004.
Note that both changes are so subtle you can barely notice them. But the problem disappears and the fix doesn’t create more issues. The last thing we want is software bearing the weight of a thousand error messages and menu choices.
While these changes are pretty minor, it starts adding up after a while. We’ve completed nearly 5,000 cases like this. And the gremlins are getting spread pretty far apart.
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