Impact of Information Disclosure on Consumer Behaviour: Case of AT1 Bonds


Mis-selling by financial service providers poses a grave threat to consumer protection. This can adversely affect the financial well-being of consumers. Mandating information disclosures in order to bridge the information asymmetry between financial service providers and consumers is one concrete way to curb mis-sale and improve consumer outcomes. This paper report results from an experimental study that examines the impact of information disclosure on consumers’ purchase decision of a high-risk financial product. We randomly assign two variations of information disclosure among the study respondents- one that is accurate, highlighting both the risks and returns of the product and the other that is inaccurate, focusing prominently on the potential gains from the product. We then examine the differences in purchase decision based on the disclosure type the respondents received and find that the odds of buying the high-risk financial product are 80 to 90% lower when the disclosure type is switched from inaccurate to accurate. The results of our study indicate the substantial impact disclosures can have in altering consumer’s decisions against welfare reducing outcomes. 

The paper is available here

About the speakers

Madhu Srinivas is a Senior Research Associate at Dvara Research with a focus on research related to Financial Systems Design. Previously he worked as a Team Lead at Latentview Analytics where his team was responsible for the portfolio analytics of the SMB lending product of an NA based payments services provider. Prior to that, he worked as an Assistant Manager at ICICI Bank in their Rural and Inclusive Banking Group, where he was responsible for SMB lending in the PSL category. He has completed his PGDM from Institution for Financial Management and Research (IFMR) and has also cleared both levels of the Financial Risk Management (FRM) program conducted by GARP.

Visit his webpage here.


Monika Halan is a best selling author and Adjunct Professor at the Indian Institute of Corporate Affairs, a Ministry of Corporate Affairs think tank. She is a regular speaker on financial literacy, regulation, inclusion and consumer issues in retail finance. She has a Master’s in Economics from the Delhi School of Economics and a second Master’s in Journalism Studies from College of Cardiff, University of Wales, UK.  Monika also has public policy experience working with the Government of India as an advisor (Swarup Committee) in 2009, was also a member on the Ministry of Finance Committee on Incentives (Bose Committee), has been a member on the Sebi Mutual Fund Advisory Committee since 2010. She was a member of the Task Force set up by the Government of India to put in place the Financial Redressal Agency. She has three published academic papers in the field of household finance. 

Visit her webpage here

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