Abstract
While advice-giving encounters form an integral part of banks’ services, clients often buy inappropriate products and face financial consequences. Legislators have started to put banks under pressure to ensure that clients are properly educated. However, the literature describes barriers due to which client education is doomed to fail applying current advice-giving practices. Practicable alternatives to the predominant perfect agent style of advice-giving are dismissed, mainly with the argument of client-side cognitive limitations. This paper challenges this assumption by suggesting a decision-making process that seamlessly integrates educational interventions, thus supporting informed client decision-making. In the spirit of design science research, the authors take a fresh look at the problems of client education in cooperation with a large Swiss retail bank to derive generalizable requirements, and design a novel IT-supported advice-giving process. An evaluation demonstrates the design’s utility in significantly improving client learning, compared to traditional service encounters. This research extends the current discourse on service encounter design, and seeks to help practitioners to design the financial service encounters of tomorrow.
Similar content being viewed by others
Notes
Exemplar discussion on regulatory challenges: http://www.finews.ch/news/banken/16937-regulierung-zuercher-bankenverband-clientis-zuercher-regionalbank-fabio-perlini-fidleg-retailbanken-retail-segment-kleinkunden (Accessed: 25.09.2016).
References
ANZ Bank (2008) ANZ survey of adult financial literacy in Australia. ANZ Bank, Australia
Baskerville R, Pries-Heje J (2010) Explanatory design theory. Bus Inf Syst Eng 2:271–282
Bradbury MA, Hens T, Zeisberger S (2015) Improving investment decisions with simulated experience. Rev Financ 19(3):1019–1052
Brennan MJ, Li F, Torous WN (2005) Dollar cost averaging. Rev Financ 9:509–535
Briggs R, Reinig B, de Vreede G-J (2008) The yield shift theory of satisfaction and its application to the IS/IT domain. J Assoc Inf Syst 9:267–293
Brown JS, Collins A, Duguid P (1989) Situated cognition and the culture of learning. Educ Res 18:32–42
Burton D (2002) Consumer education and service quality: conceptual issues and practical implications. J Serv Market 16:125–142
Chater N, Huck S, Inderst R (2010) Consumer decision-making in retail investment services: a behavioural economics perspective. Report to the European Commission, Brussels
Chen H, Volpe RP (1998) An analysis of personal financial literacy among college students. Financ Serv Rev 7:107–128
Cooper DJ, Kagel JH, Lo W, Gu QL (1999) Gaming against managers in incentive systems: experimental results with Chinese students and Chinese managers. Am Econ Rev 89(4):781–804
Eisenhardt KM (1989) Agency theory: an assessment and review. Acad Manag Rev 14:57–74
Faul F, Erdfelder E, Lang A-G, Buchner A (2007) G* power 3: a flexible statistical power analysis program for the social, behavioral, and biomedical sciences. Behav Res Methods 39:175–191
Fernandes D, Lynch JG Jr, Netemeyer RG (2014) Financial literacy, financial education, and downstream financial behaviors. Manag Sci 60:1861–1883
Fréchette GR (2011) Laboratory experiments: professionals versus students. Available at SSRN 1939219
Gafni A, Charles C, Whelan T (1998) The physician–patient encounter: the physician as a perfect agent for the patient versus the informed treatment decision-making model. Soc Sci Med 47:347–354
Gentry JW (1990) What is experiential learning. Guide to business gaming and experiential learning. Nichols/GP Publishing, East Brunswick, pp 9–20
Giesbrecht T, Comes T, Schwabe G (2015) Back in sight, back in mind: picture-centric support for mobile counseling sessions. In: Proceedings of the 18th ACM Conference on Computer Supported Cooperative Work and Social Computing. ACM, pp 486–495
Goldkuhl G (2004) Design theories in information systems-a need for multi-grounding. JITTA J Inf Technol Theory Appl 6:59
Heinrich P, Kilic M, Schwabe G (2014) Microworlds as the locus of consumer education in financial advisory services. In: ICIS 2014 Proceedings
Hevner A, March S, Park J, Ram S (2004) Design science in information systems research. Manag Inf Syst Q 28:75–105
Jungermann H (1999) Advice giving and taking. In: Systems Sciences, 1999. HICSS-32. Proceedings of the 32nd Annual Hawaii International Conference on IEEE, p 11
Jungermann H, Belting J (2004) Interaktion des als ob: Privatanleger und Anlageberater. Gruppendyn Org 35:239–257
Kirschner PA, Sweller J, Clark RE (2006) Why minimal guidance during instruction does not work: an analysis of the failure of constructivist, discovery, problem-based, experiential, and inquiry-based teaching. Educ Psychol 41:75–86
Kolb DA (1984) Experiential learning: experience as the source of learning and development. Prentice Hall, Englewood Cliffs
Land SM (2000) Cognitive requirements for learning with open-ended learning environments. Educ Technol Res Dev 48:61–78
Land SM, Hannafin MJ (1996) A conceptual framework for the development of theories-in-action with open-ended learning environments. Educ Technol Res Dev 44:37–53
Lee JS, Pries-Heje J, Baskerville R (2011) Theorizing in design science research. In: Jain H, Sinha AP, Vitharana P (eds) Service-oriented perspectives in design science research. DESRIST 2011. Lecture Notes in Computer Science, vol 6629. Springer, Berlin, pp 1–16
Novak J (2009) Mine, yours… ours? Designing for principal-agent collaboration in interactive value creation. Wirtschaftsinformatik 1:305–314
Nunamaker JF Jr, Briggs RO, Derrick DC, Schwabe G (2015) The last research mile: achieving both rigor and relevance in information systems research. J Manag Inf Syst 32:10–47
Nussbaumer P, Matter I, Slembek I, Schwabe G (2011) Information search behavior of investors and the role of advisory services. In: ECIS 2011 Proceedings, paper 46
Oehler A (2012) Die Verbraucherwirklichkeit: Mehr als 50 Milliarden Euro Schäden jährlich bei Altersvorsorge und Verbraucherfinanzen; Befunde, Handlungsempfehlungen und Lösungsmöglichkeiten. Otto-Friedrich-Universität Bamberg, Lehrstuhl für Betriebswirtschaftslehre, Bamberg
Oehler A, Kohlert D (2009) Financial Advice giving and taking – where are the market’s self-healing powers and a functioning legal framework when we need them? J Consum Policy 32:91–116
Rieber LP (1992) Computer-based microworlds: a bridge between constructivism and direct instruction. Educ Technol Res Dev 40:93–106
Rosson MB, Carroll JM (2002) Usability engineering: scenario-based development of human–computer interaction. Morgan Kaufmann, Burlington
Schiffman SS (1986) Instructional systems design: five views of the field. J Instr Dev 9:14–21
Schmidt-Rauch S, Nussbaumer P (2011) Putting value co-creation into practice: a case for advisory support. In: ECIS 2011 Proceedings, paper 138
Sonnenberg C, vom Brocke J (2012) Evaluations in the science of the artificial – reconsidering the build-evaluate pattern in design science research. International Conference on Design Science Research in Information Systems. Springer, Heidelberg, pp 381–397
The Federal Council (2015) Federal council adopts dispatch on financial services act and financial institutions act. https://www.news.admin.ch/message/index.html?lang=en&msg-id=59331. Accessed 19 June 2016
Volpe RP, Kotel JE, Chen H (2002) A survey of investment literacy among online investors. J Financ Couns Plan 13:1
Williams RE, Bacon PW (1993) Lump sum beats dollar-cost averaging. J Financ Plan 6(2):64–69
WpHG (2011) Wertpapierhandelsgesetz in der Fassung der Bekanntmachung vom 9. September 1998 (BGBl. I S. 2708), das zuletzt durch Artikel 2 Absatz 44 des Gesetzes vom 22. Dezember 2011 (BGBl. I S. 3044) geändert worden ist
Author information
Authors and Affiliations
Corresponding author
Additional information
Accepted after four revisions by Prof. Dr. Schoder.
Rights and permissions
About this article
Cite this article
Heinrich, P., Schwabe, G. Facilitating Informed Decision-Making in Financial Service Encounters. Bus Inf Syst Eng 60, 317–329 (2018). https://doi.org/10.1007/s12599-017-0501-5
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s12599-017-0501-5