Insights from the “Nudge Unit” on behavioural biases and the Consumer Duty

Listen to our interview

with Ruth Persian of the Behavioural Insights Team (BIT) – the “Nudge Unit” – about behavioural biases and the Consumer Duty.

To comply with the Consumer Duty, you need to understand and take account of your customers’ behavioural biases. This is the message delivered front-and-centre in the FCA’s Handbook and non-Handbook guidance – for the Duty as a whole and also for each of the cross-cutting rules: acting in good faith, avoiding foreseeable harm and enabling and supporting customers to pursue their financial objectives.

In short: whilst consumers retain individual responsibility for their financial decisions, behavioural biases risk impeding their ability to do so. A risk that the Consumer Duty requires firms to address.

But the FCA gives very little indication what those behavioural biases are, how to identify them in your customers, and how to make allowances for them and mitigate their impact.

That’s where our special guest comes in. In our interview, Ruth explains behavioural biases and the behavioural insights approach, how these biases impact financial decision-making, and how firms can take these biases into account when implementing the Consumer Duty.

This is an important listen, especially so close to the implementation deadline.