Surprises in Consumer Financial Decision Making: Practical Behavioral Economics

by Daniel Latimore, June 15, 2015
Global

Abstract

Consumers consistently make illogical and even harmful decisions about their personal finances. This report highlights surprising, counterintuitive, and instructive examples showcased at the Boulder Summer Conference on Consumer Financial Decision Making.

“Leading banks have begun to tailor their products and services to take account of consumer behavior,” says Dan Latimore, senior vice president of Celent’s Banking practice and author of the report. “The challenge is that the good intentions of these programs’ architects are based on intuitions that are often proven wrong in the field, or confounded by unanticipated second order effects.”

This report distills two-and-a-half days of academic presentations into 13 pithy observations and provides banks eight key ways to interact with customers differently.

This 15-page report contains one figure.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

1

 

Key Research Questions

1

Introduction

2

Conference Highlights

3

 

Savings

3

 

Alerts

4

 

Transparency

4

 

Other Takeaways

5

Lessons for Banks

8

Leveraging Celent’s Expertise

10

 

Support for Financial Institutions

10

 

Support for Vendors

10

Related Celent Research

11

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