A new regulatory approach

Regulators are becoming ever more interested in behavioural economics.  From the Financial Conduct Authority in the UK to the Netherlands Authority for Consumers and Markets, regulators are exploring how to use it when developing consumer regulation.

Not so easy to remember

In financial services, regulators and organisations must help customers make informed decisions. A challenge faced by a major financial services provider was to make sure its customers had the information to do this. Frontier helped the provider diagnose how well its customers remembered key facts. Using behavioural experiments, some surprising evidence emerged about what could help customers understand important information. Frontier’s recommendations led to changes in the sales process.

Many regulatory concerns in retail markets have customer behaviour at their root, such as levels of switching, price transparency or informed decision making.  Our behavioural economics work can support wider engagement with regulators or help develop regulatory policy.  We can achieve the right behavioural diagnosis of the problem, then develop remedies and trials to find what works for businesses and customers.

Our behavioural economics practice works closely with our regulatory and competition policy teams who advise organisations and policy makers in many sectors and countries.  In Europe, we have one of the largest economic regulation practices and our competition practice advises on many high profile cases.  We give clients confidence in applying behavioural economics, as well as responding to its growing use by regulators and competition authorities.

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