Why does presentation matter in finance?
Design is never neutral. Studies show identical probabilities framed differently produce opposite reactions. In finance, dashboards dominated by short-term red losses prompt panic, while long-term views promote composure.
Presentation doesn’t just inform, it drives emotion, and emotion drives behaviour. Poor design can mislead or overwhelm; good design supports confidence and better outcomes.
How can numbers mislead, and how should they be presented?
Percentages and relative risks often distort perceptions. People overreact to vivid figures, such as “1,286 deaths,” even when the risk is lower than a smaller-sounding percentage. In finance, saying a fund “outperformed by 2.6%” feels abstract, but showing “£260 more on £10,000” makes it concrete. Using natural frequencies, absolute alongside relative measures, and rounding where appropriate helps clients interpret numbers more accurately and calmly.
What role does framing play in shaping decisions?
The same data framed differently can trigger opposite behaviours. Short-term volatility views exaggerate anxiety and prompt unnecessary trading, while five-year rolling returns encourage patience. Framing retirement projections around gains rather than shortfalls increases contributions. Language, time horizons, and layout all act as frames, and firms must recognise that these frames influence outcomes as much as the data themselves.
What principles guide better behavioural design?
Good design starts with purpose: what decision does the client need to make, and what structure helps them make it? Clarity before detail, long-term over short-term noise, natural frequencies over abstract percentages, and reduced visual clutter all improve usability. Layout, colour, and emphasis should direct attention calmly to what matters. Friction should be introduced where reflection is needed, but pathways to positive action should be smooth, visible, and easy.
What are the regulatory and ethical implications?
Under Consumer Duty and similar international rules, firms must actively support good outcomes. This means presenting risk, return, and cost in ways clients can realistically understand. Dashboards or factsheets that predictably trigger fear or confusion fall short. Regulators increasingly expect behavioural information design as standard. Firms that embed it meet compliance, build trust, and empower clients to make decisions with less fear and more confidence.
