Rachael Ellis considers the FCA's use of clickstream data to examine customers' engagement with charges information.
The FCA has looked at how visitors to an investment platform's website engage with information about charges, by collecting data about which pages they click onto. Customers' actual activity was compared with what they say they do to engage with charges.
The 'clickstream data' showed that of all the visits to the website to look at funds, fewer than 9% of customers engaged with charges (excluding visits to fund landing pages). And under 3% engaged with documents on the side, including Key Information Documents. However, according to responses to an FCA study of the asset management sector, 77% of respondents said they looked at charges when they made their investment decisions and 45% said they were an influential factor in their choice.
The message is clear: what customers say they do is not always what they do (to illustrate, the FCA's study referenced Netflix customers being asked about what they watch: most reported viewing enlightening foreign films and documentaries but download figures showed Hollywood blockbusters and entertainment of a more low-brow nature were downloaded the most).
The findings highlight an interesting interplay between what customers want from firms and what firms should be doing. For customers of this particular platform, charges were apparently not a top priority (only during 0.1% of visits did customers sort lists of funds by charge) – even if they might say they were. However, the firm is still subject to a fundamental obligation to bring charges to customers' attention, comply with the FCA's disclosure obligations under COBS 6 and be fair, clear and not misleading about its charges.
This study may prompt the FCA to question how firms are engaging with and informing customers of charges. For example, whilst customers may not be actively seeking out information about charges, are they getting told the information further down the line from things like product brochures or application forms as part of the 'customer journey' to making an investment or buying a product?
It is easy to imagine how similar studies could be used by the FCA to monitor and assess firms in other areas. As it says in the report: "it is not difficult to imagine regulators using browsing data to understand consumer purchasing behaviours in all sorts of markets. This has huge potential to help us better understand the effectiveness of competition and the potential remedies."
In light of this, it may pay dividends for firms to get a grip on customers' activity on their website – both to 'know your digital client' and to know what the regulator may soon know about you and your client anyway.