In this monologue, the speaker argues that the specialized slang used in financial modeling—such as abbreviations like IDC (interest during construction)—acts as both a rapid communication tool for insiders and a barrier for newcomers and external stakeholders. The jargon hampers procurement processes because outsiders cannot understand the language, blurring who the true customer is. Moreover, the mismatch between financial modelers and finance professionals leads to models that contain a hodgepodge of inconsistent terminology, creating confusion, inefficiency, and potentially costly errors.
Chapters
It creates a barrier for people coming into that business. In the world of financial modeling and the world of finance as well, there are certain sets of languages that have arisen. There are words that are used, and those words are not necessarily consistent. They're slangy. They really do a few things, some positive and some negative. Sometimes they provide a quick way to describe something so that people inside that bubble can communicate quickly and get things done. In financial modeling, people say IDC, meaning interest during construction. You have to know it, but it's obviously quicker than saying interest during construction. It also creates a good barrier for procurement because coming at it from the outside, I'm talking to people now that don't speak my language. Finance is a bit of a weird case because who's really the customer there? But for financial modeling, it's quite clear, you know, I'm the provider and someone's my customer. If I can't talk their language and I'm just talking in financial modeling, it's getting in the way of procurement. So in terms of what happens in a financial modeling model, these cause problems because financial modelers don't know quite what finance people want to use, and they end up having a mishmash of stuff in their own model, which includes some of the financial modeling slang as well.
