Moral nudges and financial advice

In Treatment 1, the banker’s oath is mentioned before asking financial advice on an ethical financial dilemma. In Treatment 2, an ethical reminder that is unrelated to the banker’s oath is mentioned before asking advice for the same ethical dilemma. In the control treatment, neither the banker’s oath nor the ethical reminder is mentioned before asking for financial advice. Depending on budget constraints, it is possible that we repeat the experiment in a different country to test for country specific effects.

To compare the intervention results with expectations from concerned parties, we separately administer a survey to financial professionals, regulators, and to the general population (representing potential customers). In this survey, we describe the interventions applied in the field and then ask the survey respondents (who are not involved in the experiment and also don't know the results) what response they expect from the bank employees in each treatment.

We cooperate with a mystery shopping company that will run visits in several banks, asking employees about some financial advice. The problem will be designed in a way that bankers can either propose a solution in favor of the customer or of the bank. The mystery shopper will record the answers (directly after the visit) and some additional aspects (e.g., gender, age).

The intervention instructions for the mystery shopper are as follows.

The scenario is the specific question which you will ask the bank employee. This scenario is the same for all visits, but the treatment differ from visit to visit. Therefore, carefully read the text below, so that the differences between the scenario and the treatments are clear.

The scenario is as follows:
You want to buy a car of € 8.000,- and you are considering to do this with a loan of the same amount. You are currently employed as an ‘uitzend medewerker’ and you earn a regular income of € 2.100,- netto per month. You have € 12.000,- in savings, but you consider to keep that in reserve and you do not have any specific plans what to do with that money. You are single, have no children, and you do not have a mortgage or other debts. You are asking the bank about your options.

During each visit you ask the question mentioned above, but you add some extra information for treatment 2 and for treatment 3 (see below).

Treatment 1 (basic treatment)
You use the scenario as describe above. You do not have to add any other information.
 You want to buy a car
 You have € 12.000,- in savings and you consider to keep that money although you do not have specific plans for it
 You want to get a loan of € 8.000,- in order to finance your car
 You want to know your options

Treatment 2 (banker’s oath)
You start from the same basic treatment, but you add a remark about the banker’s oath. You always start the conversation with the remark and question mentioned below, before explaining your scenario:
“I recently saw in a consumer program/ read in the newspaper/ heard from an acquaintance that each bank employee has taken the banker’s oath.” Then you ask: “What is actually the purpose of the oath?”
 You want to buy a car
 You have € 12.000,- in savings and you consider to keep that money although you do not have specific plans for it
 You want to get a loan of € 8.000,- in order to finance your car
 You want to know your options

Treatment 3 (ethical remark)
You start from the same basic treatment, but you add an ethical remark with a question. You always start the conversation with the remark and question mentioned below, before explaining your scenario:
"I have the feeling that my own bank cares more about their own profits than about what is best for their clients." Then you ask: "How does your bank protect the interests of their clients?"
 You want to buy a car
 You have € 12.000,- in savings and you consider to keep that money although you do not have specific plans for it
 You want to get a loan of € 8.000,- in order to finance your car
 You want to know your options

Further take in account the following:
• You have visited the bank branches that have been assigned to you;
• You have fully discussed the case with an advisor and asked the relevant question;
• It is important you do not allow yourself to be 'scared off' with a reference to the website, or a story that they do not offer loans, you clearly state that you would like to be helped on the spot; You can tell the employee that you are willing to move (all) your account(s) to the bank if that is needed to get a loan.
• You have to wait 10 minutes, if an employee has not yet contacted you (and he/she is not in conversation with another customer) then you address the employee yourself. If the employee does not help you immediately, then you wait another 10 minutes. A conversation must always take place;
• You prepare yourself in such a way that you actually want to take out a loan and do not indicate that you are merely orientating yourself. In this way you give the consultant the opportunity to manage a purchase.
• Ultimately, it is important that you always get a concrete answer to your question whether a loan is recommendet in this situation or whether it is better to use your own savings.

Important for Treatment 1 and 2: If the employee asks you why you do not get a loan from your own bank, do NOT use the ethical remark as a reason in Treatment 1 and 2. Instead you can say that you want to find the best offer. The ethical remark should only be used in Treatment 3.

2019-08-12

2020-03-31

The financial advice that the bank employee gives in response to the ethical financial dilemma presented by the client.

The financial advice allows us to measure the degree of ethicality of the response.
1. We expect that mentioning the oath affects the ethicality of advisers’ response in comparison to the control treatment.
2. It is possible that the mentioning of the oath simply acts as an ethical reminder. We therefore also administer Treatment 2, which is unrelated to the oath, and compare it to Treatment 1 and the control treatment.
3. There is evidence that the client’s gender is related to financial advice, i.e. female clients receive financial advice that is less in their favor compared to males. We therefore also analyze possible treatment effects in combination with clients’ gender.

Between subjects design. Field experiment. Survey.

see field "intervention"

software

Individual

No

at least 150 observations; higher N depends on budget constraints

at least 150 observations; higher N depends on budget constraints

at least 50 observations; higher N depends on budget constraints

Minimum detectable effect size is 1 Likert scale unit on the outcome variable (minimal deviation possible in individual responses) at a standard deviation of 1.7 and a power of 80%.