BIS paper: banks may harm customers through ‘steering’
Nudging “naive” households to take decisions can harm their welfare, authors find
Banks may be able to benefit from “steering” their customers towards certain products, but this can harm people’s welfare, a working paper published by the Bank for International Settlements finds.
The cost of steering in financial markets: evidence from the mortgage market analyses steering by Italian banks. Steering can take many forms – it might be as simple as explaining a complex financial product, but it could also involve shrouding some aspects of a product to distort a customer’s choice
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