Experts explain how Russians can avoid overpaying at banks
Human financial behaviour is influenced by emotions, which is why bankers use psychological knowledge to sell services
“Imagine you are offered two deposit options at a bank: the first offers an annual return of 8%, the second — 10%, but with a 2% fee for early withdrawal. Despite the mathematical equivalence of both offers, most people are likely to choose the first,” — participants of the open discussion hosted by the president of the Association of Russian Banks on the topic “Behavioural Economics in the Banking and Financial Sector” said, illustrating how clients are manipulated. This example, they noted, demonstrates how financial institutions have learned to understand the behaviour of their target audience and to influence their decisions. And although banks are not fraudsters, behavioural psychology plays a key role for them. Read more in the report by Realnoe Vremya.
Modern banking is not about money — it’s about behaviour
Participants in the discussion suggested asking a simple question: when was the last time you read a bank deposit agreement? If the answer is “never”, it means the bank has effectively applied the principles of behavioural psychology. The modern banking sector in Russia is no longer just about numbers, but about a deep understanding of human psychology and decision-making processes. Experts agreed that a person’s financial behaviour is influenced by emotions and irrational motives. Therefore, credit institutions use this knowledge to make their offers as attractive as possible, even when the “benefit” is merely an illusion.
To illustrate, one Russian bank managed to increase sales of premium cards by 34% simply by adding another, more expensive “ultra-premium” option priced at 5,000 roubles. This marketing move influenced customer perception in the following way: a 990-rouble card, previously viewed as premium, began to be seen as a more affordable, mid-range option that no longer seemed costly.
This is an example of the “anchoring effect”, where the first proposed value serves as a reference point, shaping the evaluation of subsequent choices.
One of the distinctive traits of Russian society is a tendency to neglect the future, driven by fear of uncertainty and concerns that the future may never come or may drastically change. As a result, Russians find it “very difficult to save for retirement”, as it seems abstract and distant.
The opportunity to buy a smartphone and enjoy satisfaction “here and now” appears more appealing. This behavioural pattern is known as the “present bias”, when immediate rewards outweigh potential future benefits.
How to tell if a bank is manipulating you
It is important for consumers to understand the difference between the use of the nudge concept and misselling practices in the banking sphere, participants of the discussion noted. A nudge is a gentle, unobtrusive influence on the client’s choice that does not restrict freedom. Its goal is to steer a person towards an option considered more beneficial for them or for society, without coercion. In contrast, misselling is the unethical sale of financial products or services, when a client is offered something unsuitable, misaligned with their needs, or disadvantageous.
The bright side — Nudge | The dark side — Misselling |
Suggesting to save 20% of salary for unforeseen expenses | Hidden fees in fine print |
Reminder to top up a savings account | Automatic activation of paid services |
Disabling unused overdraft to save money | Selling complex products as simple deposits |
Dark patterns: bright “Activate” button and pale “Decline” one |
A headache for the Central Bank — risk-takers and savers
The Central Bank is concerned about the challenges behavioural economics poses to the financial system. One issue is the polarisation of Russians’ financial behaviour. On one hand, some citizens act cautiously, avoiding risk and preferring conservative instruments such as deposits and real estate — which restrains the development of more efficient investment opportunities.
“On the other hand, there is a group of people prone to unjustified risk and reckless ventures, ignoring potential consequences. These are individuals convinced they can “outsmart” the market, which makes them vulnerable to financial pyramids," Presnyakova noted.
Building a healthy financial culture requires addressing both extremes when improving financial literacy. At the same time, the Central Bank considers the economically active population a priority target group, since it is their daily financial decisions that shape the economic landscape and influence the financial behaviour of both younger and older generations.