Behavioural science for financial services
Behavioural science for financial services14 June, 2019 •
We’ve been exploring how financial service providers can translate new insights from behavioural science into the design and delivery of financial services
These systematic reviews conducted in 2017 and 2018 sought to identify behavioural interventions that have been proven to influence the credit, saving, insurance or payment decisions of customers. We’ve published the results from the first systematic review here, and we’ve captured and categorised (in our interactive online database) the papers identified in the first and second review.
This second systematic review of the available research has allowed us to update our database and include new interventions. These interventions have been proven to influence how people make decisions and can play a role in narrowing the gap between customers’ financial decisions and actions.
This guide seeks to describe a set of behavioural interventions that have reduced the cost of acquiring new customers, that improve the retention of existing customers and that have assisted in achieving positive customer outcomes, such as timely credit repayments and improved savings.
There are four themes that the 23 unique interventions fall under: client choice architecture, commitment feature, pricing and financial benefits, and client communication. Some of the interventions from the update include:
- Opt-in/opt-out default choices. These are pre-selected product options (e.g. savings contributions levels) that will prevail unless the consumer selects an alternative.
- Social enforcement. Communicating the financial decision (or behaviour) of an individual to members of the individual’s social network (e.g. informing peers when a loan is repaid).
- Prize-linked. A lottery confers a prize to a financial services account holder if they meet certain conditions (e.g. an individual is eligible for a USD5,000 monthly lottery if they deposit more than USD100 into their savings accounts).
- Signalling. Use of status, quality or in-group attributes (e.g. platinum cards or gold medical aid package) to influence financial decisions.