Bringing Science To Compliance
If you’ve read any of my previous blogs, you’ll know that I’m a huge proponent of Behavioural Science (BeSci). Generally, and more particularly within my own areas of specialism.
Not just because it allows me to talk about Bringing Science To Compliance, but also because I think it’s a (cost) effective way of delivering good outcomes. Organisations can’t be compliant or non-compliant of their own accord; it’s the people working within them that determine that. It’s equally important for my other discipline of Operational Risk Control; people are the biggest single driver of risk. Traditional extrinsic motivators clearly don’t always work, so we need to look at also using far more powerful intrinsic ones.
Of course, BeSci isn’t just of use to risk and compliance functions; it has applications across all parts of organisations. But I think we have a key role to play in their use within organisations.
BeSci: Bad Sci?
One of the criticisms often levelled at BeSci is that it is somehow unethical or manipulative. Whilst it is true to say that BeSci techniques like nudging can be used to bad ends, that doesn’t make them bad per se. I’ll leave a longer rebuttal of the ethical question to an essay entitled The Ethics Of Nudging by one of the godfathers of it, Cass Sunstein.
But I am conscious that in an industry with a history of wrong-doing, where regulators have specifically focussed on the misuse of BeSci by Firms, that we need to be extra vigilant in our use of BeSci interventions.
Not just because we’re told to, but rather because it’s simply not good business to deploy BeSci in a manner that is exploitative. If we use interventions, we need to ensure they stand the test of time and that they are genuinely delivering good outcomes. We want to avoid reactance in the moment and resentment afterwards.
F is for Fairness
We do this by ensuring that the idea of fairness is at the heart of any BeSci interventions we deploy. Practitioners of BeSci will be well aware of the EAST framework created by the Behavioural Insights Team. For the uninitiated, it’s a way of thinking about BeSci interventions. To encourage a particular behaviour, make it:
Source: Behavioural Insights Team
For more on each aspect, read BIT’s excellent summary document. In my experience, it works really well.
To ensure that all of our BeSci interventions start with the principle of Fairness, we’ve taken EAST and added an F for “Fair” to the beginning to make FEAST.
Whilst it isn’t always possible to make interventions that are simultaneously Easy, Attractive, Timely and Social, it is critically important that every single one deployed is Fair. In practice, this means a focus on two things:
- Treating our customers fairly:
– is what we’re trying to get them to do genuinely in their best interests?
– have we been transparent in offering alternatives?
– does our intervention inadvertently exploit information asymmetry?
- Treating our employees with respect:
– is our proposed intervention appropriate?
Whilst it is, in theory, easy for designers of BeSci interventions to determine whether something is likely to be Easy, Attractive, Social or Timely, it’s somewhat harder to determine whether something is Fair. After all, if you’ve worked hard to design an intervention that you think is effective, then Confirmation Bias will probably allow you to conclude that it is.
Which is where Compliance and Risk can help by providing an independent perspective. Yet another reason I’m of the opinion that BeSci is a skill that should be in the armoury of all Compliance professionals.
The other reason I like adapting EAST to FEAST is that it allows me to use food-related imagery. Like the photo above.
As BeSci becomes more widely used, I think the question of Fairness is going to become more important. Which not only means the F in FEAST becomes even more critical, but also requires those of us promoting BeSci to spend more time thinking about what is truly in the interests of those we’re seeking to influence.
I think that’s a good thing.