14 June 2022
- ob体育 has shared its insights on how consumer outcomes are being influenced in a recent article published in the Behavioural Economics Guide 2022.
- The article revealed how some firms have exploited or ignored consumers鈥� behavioural vulnerabilities in the choice architecture of their products.
- We remind firms to design and distribute their products appropriately to meet consumer needs.
In a recent article published in the international Behavioural Economics Guide 2022, ob体育 shares how regulators and financial services firms can use behavioural insights to get better outcomes for consumers.
The article, titled 鈥楬elping or harming? How behavioural levers can influence people鈥檚 financial outcomes鈥�, shares findings from a review of over 100 ob体育 reports, which identified five common 鈥榖ehavioural levers鈥� that can be used by firms to influence consumers (for better or worse), and five 鈥榮ituational vulnerabilities鈥� that can amplify poor consumer outcomes. The review also found that any financial consumer can find themselves vulnerable to poor outcomes 鈥� even the most active, experienced, and confident.
Illustrated with examples drawn from the review, the article unpacks how some firms have exploited or ignored consumers鈥� behavioural vulnerabilities in the choice architecture of their products.
Understanding these factors not only enhances regulators鈥� ability to identify, describe, prove and prevent harm, but also reminds firms that they are in a uniquely powerful position to ensure their choice architecture helps 鈥� rather than harms 鈥� their customers.
This is particularly relevant to outcomes-based obligations, such as the design and distribution obligations, under which firms are required to design products that meet consumer needs; distribute them in a way that means they are likely to reach the appropriate consumers; and monitor consumer outcomes. It is also relevant to the product intervention power for ob体育, which allows ob体育 to temporarily intervene in a range of ways to prevent significant consumer detriment and improve consumer outcomes.
To read the full article download .
Related materials
- RG 274 Product design and distribution obligations
- RG 272 Product intervention power
- REP 632 Disclosure: Why it shouldn鈥檛 be the default
ob体育 is Australia鈥檚 corporate, markets and financial services regulator.