In 2006, Mintel published a report about Behavioral Finance and described how financial decisions and behaviors are not always rational. Rather, cognitive biases and emotional distortions often influence consumer financial decisions. Since that time, the world has experienced a massive global financial crisis, from which we are still struggling to emerge. With all the knowledge about economics and behavior, it comes as a surprise that we are not able to avoid repeating the same mistakes that lead us to create financial bubbles that eventually burst and result in a financial collapse.

In 2006, Mintel published a report about Behavioral Finance and described how financial decisions and behaviors are not always rational. Rather, cognitive biases and emotional distortions often influence consumer financial decisions. Since that time, the world has experienced a massive global financial crisis, from which we are still struggling to emerge. With all the knowledge about economics and behavior, it comes as a surprise that we are not able to avoid repeating the same mistakes that lead us to create financial bubbles that eventually burst and result in a financial collapse.

This report updates the 2006 Mintel report in light of changing economic conditions, and presents new insights that have emerged from the growing field of behavioral economics, as well as new ways in which these insights have been applied to marketing financial products and services, as well as strategic decisions that are made within the industry.

Some of the practical implications for the financial services industry which are discussed in this report include:

How people choose among the myriad array of options for insurance coverage

Why they gravitate toward particular savings vehicles

How consumers choose to finance spending for big-ticket items, as well as everyday expenses

What types of information consumers are most likely to pay attention to, and what types of messages are likely to have the greatest impact on financial decisions

How marketers and financial executives are impacted by the same cognitive biases as their customers, which can potentially influence everything from risk management to product development