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Encouraging consumers to switch between financial products

  • Projects and activities | 15 Sep 2020
Behavioural Insights

Context

Consumers' reluctance to consider switching providers is a problem in certain markets for financial products.
For example, once people have signed a mortgage, they rarely re-check a few years later whether another bank can offer them a better deal. If consumers don’t keep searching for the lowest price and the highest quality, competition among firms will be weak – and so will any benefit to consumers that could derive from it.
Making it easier for consumers to switch to more advantageous financial services is one of the goals of the European Commission’s Consumer Financial Services Action Plan.

Goals

The project aims to explore the reasons why consumers don’t switch between payment accounts and mortgages, and to test possible behavioural remedies for this. These include:

  • providing a tool for comparing financial service providers
  • reminding consumers of the benefits (and disadvantages) of switching providers
  • providing personalised advice on switching

Methods

The project uses the following methods:

  • a literature review, covering the policy context, behavioural barriers to switching, and an overview of possible remedies,
  • 2 lab experiments, focusing on the market for current accounts
  • 2 online experiments, focusing on the mortgages market.

Expected outcomes

The results of this study are expected to contribute to goals of the Consumer Financial Services Action Plan.

More information and links
Project ID
BIs-Switch
Coordinators
Ginevra MARANDOLA
Participants
Joana SOUSA LOURENCO
Antonios PROESTAKIS
René VAN BAVEL
Geographic coveragePolandGermanySpain
Originally Published

15 Sep 2020

Knowledge service | MetadataBehavioural Insights | Behavioural insights for consumer protectionBehavioural insights for finance
Digital Europa Thesaurus (DET)consumer behaviourfinancial market
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