Partnering with five UK depositories, we tested multiple disclosure designs in a range of field trials. Each financial institution helped to complete one trial for a total of five trials. All trials were conducted with customers who held an easy-access savings account with one of the partnering UK financial institutions at the time of random assignment. Customers were experiencing a rate decrease in three trials (Trials 2, 4 and 5) and were already on a relatively low rate in two trials (Trials 1 and 3). Trials 1, 2 and 3 provided customers with forward looking information about interest rates currently available to them. The trials varied in terms of the situation in which the customer received the disclosures (whether at the point of an interest rate decrease) and the specific disclosure designs tested within each trial.
Customers in the reverse-page switching box trial (2) and in the reminder trials (4 and 5) faced an interest-rate decrease to a level that was significantly below the average of what new customers could obtain. In these trials, the firms sent letters to customers informing them of the old and new interest rates and some general contact details for further information no later than 60 days before the interest rate decrease, in accordance with EU regulatory requirements. In the reverse-page switching box (2) and the SMS reminder trials (5), the rate decrease applied to all customers holding the particular type of the account and occurred on the same date for everyone. In the digital reminder trial (4), the rate decrease occurred a fixed period of time after the individual account opening date and was part of the account terms and conditions. Customers in the front-page switching box (1) and the switching-form trials (3) faced no interest rate decrease but were already receiving an interest rate that was significantly below market average of what new customers could obtain. These customers received no other specific communication in advance of the information sent out during the trial.
In Trial 1, consumers were already on a low rate and were due to receive their annual statement in autumn 2015. Customers were randomly selected into five equally sized groups. The control group received an annual statement with no additional information on the front page. For treatment groups, different information was added to the front page of the annual statement depending on the treatment arm. This included a simple encouragement to shop around for another account; a comparison of the currently applicable rate with the highest rate available on a comparable account with the current provider (best internal rate); the best internal rate with the same provider and the average of three highest rates on comparable accounts with competitors (best competitor rates); and a final variant which added a graphical illustration of gains from switching. The monetary gains used in the illustration were based on an illustrative balance of £100, £1,000 or £10,000, depending on which was the next lowest to the customer’s actual savings balance at the time (for example, for an actual balance of £250 the illustration was for £100). We excluded customers with balances lower than £100.
In Trial 2, customers at the time of disclosure had rates close to market rates and were being notified of an impending rate decrease. Customers who had opted out of marketing communications were excluded from this trial. All letters were sent more than two months ahead of the rate decrease. Customers were randomly assigned to one of five equally sized groups: a control group and four treatment groups. The control group received a letter which notified the customer of the rate decrease on all affected instant-access accounts early summer of 2015. The control letter included no additional information about internal or external rates. The treatment groups received additional information on the back page of the letter, formatted into a call-out box (referred to as the “switching box”) with a graphical comparison of interest rates. Each treatment group received information about the best available interest rate with the current provider. The four treatment groups differed by whether the disclosure was personalized and whether it included information on the best competitor rates (the average of the three highest rates on comparable accounts), for a total of four possible combinations. The two non-personalized treatments (one displaying external rates and one not) had an illustration of monetary gains from switching based on an assumed balance of £5,000, and the personalized disclosures used each individual's balance at the time of mailing to illustrate the gains.
Trial 3 featured a disclosure bundled with a switching-process improvement designed to lower both the expected time cost of switching and its uncertainty. In addition to providing information as in Trials 1 and 2, we test the effect of providing a form that can be completed and returned to the firm in order for the customer to be switched to an identical, “front book” product paying a better rate at the same provider. In August 2015, the provider sent a one-off mailing to encourage long-standing customers to switch to an equivalent internal account with a significantly higher rate. The customers were selected randomly into two equally sized groups. The control group received a letter with a switching box that included the best internal rate and the best competitor rate as noted above, as well as potential gains from switching based on a non-personalized balance example (£5,000). The treatment group received the same letter, but with a tear-off return switching form pre-filled for a switch to the best internal rate and a prepaid, addressed envelope.
In Trials 4 and 5, we test the effect of timely repetition of informational disclosures through reminders sent via email or SMS. In Trial 4, we test email or SMS reminders sent to consumers who held accounts that experienced scheduled rate decreases during June-September 2015. The trial sample consisted only of customers who all had an email address and a mobile phone number on record. Over 90% of customers in the sample had both email and phone number on record. The partnering institution reported that around 2% of email reminders and around 10% of SMS reminders could not be delivered due to invalid records. We do not adjust trial results for failed deliveries. Customers were randomly selected into three equally sized groups. The control group received only an initial letter sent at least 60 days before the rate decrease, as mandated by current regulation. Two treatment groups were then issued either an email reminder or an SMS reminder in addition to receiving the same mailing as the control group. The email reminder was similar in its content to the letter sent to all groups. It included information about the previous and new interest rates, and in addition to the initial letter it included the best interest rate available on a comparable account with the firm. The SMS reminder was shorter and included no information on interest rates. Due to logistical constraints we sent the reminders on one actual date to all customers, as it was not possible to randomly allocate reminders to be sent at different points of time. Each customer account had an interest rate decrease date which was within eight weeks before and seven weeks after the date of sending the reminders.
In Trial 5, we test the effect of an SMS reminder around the time of a rate decrease in early summer 2015. All customers in the trial had a mobile phone number on record. The partnering institution evaluated that around 8% of reminders were not delivered to customers in the treatment groups due to invalid phone number records. We do not adjust trial results for failed deliveries. Customers were randomly selected into one of five groups. The control group received no further communication following the initial letter sent 60 days or more before the rate decrease. Customers in the four treatment groups received an SMS reminding them of the rate change, one week before, one week after, or on the day of the rate decrease. For those receiving the SMS on the day of the rate change, the SMS either encouraged switching or said that there was no higher rate on a comparable product available. Each treatment group included 16% of the trial sample and the control group included the remaining 35% of the sample. Customers who switched between assignment and the due date of the reminder still received the reminders and were retained in the sample to ensure that the comparison of effects of timing is consistent across all treatment groups.