Navigating the Toggle Terrain: The FCA Consumer Duty in Action

While exploring the world of FCA Consumer Duty, I found myself circling the behaviour basis vortex. To untangle my thoughts, I caught up with an old colleague, the extraordinary Francine Loza - a wizard in the realm of data science. Together, we journeyed into the core of behaviour-bias and the intricate dynamics of toggles.

Behaviour-bias originates from the understanding that traditional economic theories, which assume rational decision-making, don't always cut it in explaining human behaviour. This idea emerged from the work of psychologists Daniel Kahneman and Amos Tversky, and later economist Richard Thaler. They observed that people often behave in predictably irrational ways, swayed by cognitive biases and mental shortcuts. Think about how we often procrastinate, are overly optimistic about future actions, or get influenced by the way options are presented - a phenomenon known as "framing".

Now, let's translate this into something more tangible - toggles. Consider toggles as junctions in the road - they steer our customers' decisions. For example, an insurance firm might have a toggle allowing customers to add or decline additional cover options. As firms, it's our responsibility to make sure our customers know why they're standing at a junction and what each path signifies.

The challenge lies in the fact that sometimes, especially the vulnerable customers, might not even realise they're at a junction. That's why it's critical to make these toggles and their purpose, unmistakable. In the FCA Consumer Duty realm, it's crucial that we continually reassess our toggles: Why are they positioned where they are? Are they subtly pushing customers in a direction they didn't intend to go? Remember, the FCA Consumer Duty aims at providing consumers with a fair deal, which means scrutinising our toggles and ensuring they don't lead our users, particularly the vulnerable ones, astray.

If you’re into blogs that bring real-world examples to life, check out my other articles.

Until next time!