Organisational Culture & Behavioural Risk

Learn how behavioural economics will help protect your firm from conduct risk, create better outcomes for your customers and keep the regulator happy.

Course Outline

People like to think they make rational buying decisions. But the evidence points to a different conclusion: they don’t. Errors made by consumers are persistent and predictable.

Complex financial products are even harder for people to understand – which increases the likelihood of poor decision-making. Behavioural economics can provide valuable insights into how and why customers make poor financial product decisions.

It is no surprise this has become a hot topic for the FCA.

The regulator intends to increase its use of behavioural economics as a tool for future investigations and reviews. With limits to “buyer beware”, firms need to be sure they’re not using behavioural insights in a way that exploits customers.

What is good for the customer is good for the firm.

But this regulatory evolution is not just a threat; it’s an opportunity. The best financial services firms are the most consumer focussed. PwC estimates that since 2008, those firms that have best put the customer at the heart of their business model have outperformed the market by 2.2 times.

Behavioural insights help you better understand the fallibility of your customers’ decision making. And, thus, make it easier for you to design strategies, products and information that help your customers make better product decisions – improving outcomes for them and your firm.

Join this fascinating and practical programme to explore behavioural economics:

• Get an insightful introduction into the topic of behavioural economics
• Better understand the link between behavioural economics and conduct risk
• Get the latest FCA view and understand why it cares so much about this topic
• Better understand how your customers make buying decisions
• Realise just how bad people are at assessing risk and uncertainty
• Discover how emotions affect buying decisions
• Learn how complex financial products are erroneously simplified by consumers
• Learn how to spot and mitigate consumer biases in relation to the key conduct risks

Behavioural economics can change the way you operate

Gain a competitive advantage. By adopting the behavioural economic principles faster than your rivals, you will gain the advantages of developing a more compliant, sustainable and customer-centric business model.

Better serve your customers. When you can better understand why your clients behave the way they do, you can design products to best serve their needs and, ultimately, make your firm more competitive.

Better manage conduct risk. By gaining greater insight into how your customers and prospects interact with financial services, you can better understand how actions lead to miss-selling and consumer detriment.

Proactively respond to the regulator. Instead of waiting until regulations change, like many firms do, this course helps you get on the regulatory front foot. This means you can deal with change in a more gradual and strategic manner.

Future-proof your business. Some will look to exploit consumer decision-making flaws. But savvy firms know the regulator will come down hard on those that knowingly, or unknowingly, take advantage of our propensity to make bad decisions.

Course Modules

• An introduction to behavioural economics
• Behaviour and why we’re often our own worst enemy
• How do biases affect consumer decisions?
• What we can learn from the past?
• The implications for you and your firm
• Conduct risk and the link to behavioural economics
• Designing products: Making sure consumer behaviour is considered