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Consumers and competition: delivering more effective consumer power in retail financial markets

Lowe, Jonquil (2017). Consumers and competition: delivering more effective consumer power in retail financial markets. Financial Services Consumer Panel, London, UK.

URL: https://www.fs-cp.org.uk/sites/default/files/fscp_...
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Abstract

Competition reviews of retail financial markets are frequent and commonly include recommendations designed to increase consumer shopping around and switching in order to drive competition. However, many of these markets are characterised by 'monopolistic competition' and firms use a variety of tactics to increase or maintain their market power, including product complexity, price obfuscation and price discrimination. These tactics are effective because they exploit consumers' behavioural traits, such as status quo bias, anchoring, present bias, satisficing, and more. As such, consumers are not equipped to engage actively in these markets as regulators would wish. However, digital innovation may hold the answer, if mass-market consumers delegate the tasks of shopping around and switching to automated services via computers and mobile apps. Innovation is already moving this way, but raises issues around data security, conflicts of interest and trust, which will need to be resolved.

Item Type: Other
Copyright Holders: 2017 Financial Services Consumer Panel
Project Funding Details:
Funded Project NameProject IDFunding Body
Consumers and CompetitionNot SetFinancial Services Consumer Panel
Keywords: consumer engagement; competition regulation; financial services; behavioural economics; monopolistic competition; digital innovation; fintech; data security; conflicts of interest
Academic Unit/School: Faculty of Arts and Social Sciences (FASS) > Politics, Philosophy, Economics, Development, Geography
Faculty of Arts and Social Sciences (FASS)
Interdisciplinary Research Centre: Innovation, Knowledge & Development research centre (IKD)
Item ID: 50320
Depositing User: Jonquil Lowe
Date Deposited: 31 Jul 2017 08:14
Last Modified: 31 Jul 2017 08:14
URI: http://oro.open.ac.uk/id/eprint/50320
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