2016年-FCA英国金融行为监管局_occasional_paper_19_52页_2mb

Summary of Attention, Search and Switching: Evidence on Mandated Disclosure from the Savings Market

Core Content

This paper investigates the effectiveness of mandated disclosure interventions in the UK savings market, focusing on how they influence consumer switching behavior. The FCA conducted five randomized controlled trials (RCTs) with over 130,000 savings account holders to evaluate the impact of three types of interventions: search and comparison, ease of implementation, and attention. The goal was to determine whether these interventions could help consumers make more informed decisions and increase competition among financial providers.

The study is based on the FCA’s 2015 review of the UK cash savings market, which highlighted that many consumers hold low-interest accounts and rarely switch, even when better alternatives are available. The FCA proposed several regulatory measures to address this, including improved disclosure, simplified switching processes, and timely reminders. The paper evaluates how well these measures worked in practice.

Key Findings

• Front-page switching box (Trial 1) increased switching from 3% to 6%, indicating that prominent information about better rates can influence consumer behavior.
• Non-front-page switching box (Trial 2) had no effect on switching behavior.
• Pre-filled return switching form (Trial 3) significantly increased switching from 3% to 12%, suggesting that reducing the effort required to switch can have a strong impact.
• Email and SMS reminders (Trials 4 and 5) led to an 8–9 percentage point increase in switching, especially when sent close to the rate decrease date. This aligns with previous research on the importance of timing in prompting action.
• Switching within the same provider was increased by all interventions, but switching to higher-paying products from other providers was not stimulated, indicating that multiple factors influence consumer choice of provider.
• Despite the low time cost of switching (15 minutes on average), the overall switching rate remained low (17% across all trials), even among those provided with relevant information about better interest rates.
• Monetary incentives were a key factor: consumers with larger balances were more likely to switch, and the potential gains from switching were often less than £32 for many, which may not be enough to justify the effort.

Main Viewpoints

• Disclosure design matters: Front-page information about better rates had a modest effect, while pre-filled forms had a much stronger impact.
• Attention is crucial: Timely reminders, especially those sent close to a rate decrease, significantly increased switching behavior.
• Effort and cost are major barriers to switching: even when information is available, the process of switching can be too cumbersome for many consumers.
• Consumer behavior is complex: While some interventions increased switching, they did not lead to widespread movement between providers, suggesting that other frictions (e.g., habit, lack of awareness, or time constraints) also play a role.

Key Information

• Trials Overview: Five trials were conducted with different interventions:

  • Trial 1: Front-page switching box with varying levels of information.
  • Trial 2: Reverse-page switching box with information on internal and competitor rates.
  • Trial 3: Pre-filled return switching form.
  • Trial 4: Digital (email/SMS) reminders about rate decreases.
  • Trial 5: SMS reminders sent one week before or after a rate decrease.

• Customer Demographics:

  • In Trial 1, customers had balances significantly below the market average.
  • In Trial 4, 75% of customers had balances over £4,000.
  • In Trial 5, 60% had balances over £5,000.

• Switching Definitions:

  • Internal switching: Switching within the same provider.
  • Other switching: Switching to a different provider or account type.
  • Non-switchers: Customers who did not switch.

• Outcome Measures:

  • Switching was defined as converting, closing, or emptying an account.
  • An account was considered "emptied" if 95% or more of the balance was withdrawn.

• Limitations:

  • The study could not isolate the outcomes of Other switchers due to the lack of detailed data on their final account choices.
  • Many consumers with low additional interest gains still did not switch, indicating that the perceived benefit may not be enough to overcome inertia or effort costs.

Conclusion

The research suggests that while disclosure and simplification of switching processes can increase consumer switching behavior, the impact is limited due to various behavioral and practical barriers. The most effective intervention was the pre-filled return switching form, which significantly increased switching rates. Reminders also had a notable effect, particularly when timed close to a rate decrease. However, the overall low switching rate indicates that other factors, such as habit, cognitive load, and time constraints, may be more influential in consumer decision-making than the mere availability of information. These findings inform future policy development by highlighting the importance of designing interventions that reduce switching costs and increase attention to relevant financial information.