Financial consumers, digital interfaces and decision aids

Retail financial products are increasingly sold online. This trend raises issues of consumer protection, given large asymmetries of information and understanding between consumers and providers, who programme the relevant software. Yet digital interfaces can also be used to offer digital decision aids that benefit consumers. Fortunately, digital environments lend themselves to controlled experiments, permitting diagnosis of where interfaces cause disadvantage and allowing decision aids to be pre-tested for effectiveness. This chapter provides examples of how controlled behavioural experiments can be deployed by regulators to ensure that digital interfaces and the intelligence embedded within them benefit consumers of financial products. It discusses whether providers should be required to undertake standardised experimental testing to demonstrate that their digital interfaces benefit consumers.