Designing ethical nudges, Scotland
In this chapter we discuss how often customer experiences tend to be designed with some technical rational thought, but little consideration of how people actually think and behave. We use nudges to help make people make decisions, and we need to do so in ethical ways.
As we covered in the chapter, behavioural science can be used to remove the negative types of “cognitive friction” which are hindering people from making the best decisions for themselves, and sometimes add in "positive friction" to help people make good decisions.
Here is a great article that discusses how Monzo, the app-based challenger bank, are creating positive friction and helping people to review their late night purchases the following morning!
We see in Chapter 11 how nudging can be ethical and how the ethics of nudging lies in the morals of the practitioner. Use your company values as your moral lodestar.
Standard Life used ethical nudges to help not only their shareholders but also their customers and employees. Using behavioural science to minimise the effect of the “Power of Free”, Cowry helped Standard Life make their choice architecture as neutral as possible in the decision for pension drawdown via digital means or via the call centre.
By using nudge theory ethically, Cowry demonstrated how you can create value for the customer as well as the company.
Unethical nudges do not go unnoticed, for example Ryanair opting those who had purchased a flight into automatic travel insurance in a hidden box can produce negative publicity.
See here for the online community that exposes such practices!
Ensure your nudges are fair, ethical and in keeping with your business values.
1. Does it align with my personal ethics
Put yourself in the shoes of the person being nudged. Are you able to choose fairly, is there anything that prevents you from doing this?
2. Does it align with your company ethics
By scheduling governance sessions to consider psychological compliance with your risk and legal teams, you can ensure nudges pass through the equivalent of an ethics committee. Whats more, as an organisation you should do unto others as you would have them to do you. Practice what you preach and a culture of ethical nudging will follow.
3. Does it align with the wider market’s ethics
Check whether your approach to applying behavioural science complies with the ethical guidelines of the market in which you operate.
Cass Sunstein, the author of Nudge is the leading expert on the ethics of nudging and see here for videos and links for his counsel and leadership.
There is also a growing narrative around nudge vs more darker patterns or 'sludge'.
Do your nudges align with the wider market's ethics?
Familiarise yourself with the guidelines from governing bodies of the market in which you operate.
Financial Conduct Authority https://www.fca.org.uk/publication/occasional-papers/occasional-paper-1.pdf
The Office of Gas and Electricity Markets https://www.ofgem.gov.uk/sites/default/files/docs/2011/03/behavioural_economics_gbenergy_1.pdf
The Competition and Markets Authority https://www.oxera.com/wp-content/uploads/2018/07/Homo-economicus-and-Homo-sapiens.pdf.pdf
Centre for Competition Policy http://competitionpolicy.ac.uk/documents/8158338/8193541/CCP+economics+book+Final+digital+version+-+colour.pdf/30214557-cace-4b0b-8aac-a801bbde87bc
The Netherlands Authority for Consumers and Markets https://www.acm.nl/sites/default/files/old_publication/bijlagen/11586_oxera-behavioural-economics-competition-policy.pdf
