CASE STUDY: How Quilter and Cowry used behavioural science to tackle consumer duty

Emily Sweigart

By Emily Sweigart, Cowry Consulting

The Financial Services Forum’s ‘Applying Behavioural Science to Business: The Deep Dive’ event saw leading experts in the field come together to discuss the role of behavioural science in the financial services industry following regulatory changes. Quilter and Cowry Consulting unveiled their newest project, an FCA compliant behavioural science communications toolkit.

The introduction of Consumer Duty guidelines from the FCA has reflected the gap in consumer financial understanding and highlighted the need for accessible communications across the industry. Interestingly, a survey found that around 47% of customers struggle to understand financial information given by their service providers and do not feel confident in making decisions. The FCA emphasised the importance of testing the effectiveness of new communications with real consumers to ensure that correspondence and information is consistently updated to best serve consumers and their outcomes.

Jeremy Mugridge, Head of Marketing and Behavioural Science recognised the opportunity for Quilter to respond to the new industry regulations using behavioural science, as they had been successfully applying it for a number of years: “‘When it comes to helping customers understand financial information and make informed decisions, we wanted our approach to be backed by empirical evidence and have behavioural science thinking at its heart. Consumer Duty has given us the opportunity to adopt a consistent and scientific approach to communicating effectively with our customers in order to help them achieve positive financial outcomes”, said Jeremy.

As Quilter’s Behavioural Science partner, Cowry Consulting were tasked with developing a behaviourally-informed approach for communications across the Quilter business in response to the new regulations and in a bid to better support customers.

Cowry carried out an extensive thematic analysis of Quilter’s previous communications and marketing campaigns and leveraged academic insights to identify both barriers and drivers to understanding financial information.

To quantify and validate the elements within communications that most impact customer understanding, the Cowry team designed a piece of primary research grounded in our brain’s two modes of processing. The first of these, System 1, is an evolutionarily ancient processing stream sensitive to visual input and rapid, sometimes emotional reasoning. The second, System 2, is an effortful and elaborate processing mechanism that is responsible for higher-level reasoning and comprehension. This approach provided the foundation for the teams to design a set of communication interventions that would both help to direct consumer attention to the right information at the right time and enable deeper understanding.

To measure the impact of behavioural science, the team created behaviourally optimised communications to test the role of these different interventions. The experimental design leveraged AI technology as well as implicit and explicit research techniques. The results of this informed which behavioural science techniques would be included in a communications toolkit, ensuring that it consists of those that measurably promote and enhance understanding.

The final toolkit takes a holistic approach to human understanding and processing. Phoebe Kent, Lead Behavioural Designer from Cowry said: “The New Consumer Duty created a perfect opportunity to really dig into the psychology behind how the brain really goes through the process of understanding.

“The insights we uncovered through our research demonstrated the importance not only of how we use language to communicate financial information, but also how elements of behavioural design can have a significant impact on understanding. We’re pleased that Quilter can now tackle this new regulation with confidence that their approach to communications is backed by behavioural science”.

The communications toolkit project for Quilter underlines the importance of using behavioural science to understand consumers and uncover the drivers behind their behaviour. This will ultimately help customers achieve financial capability and wellbeing.

If you’d like to learn more about applying behavioural science in your business, get in touch now via [email protected].

Watch our video from the event featuring Quilter and Cowry below:

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