Consumer Futures yesterday publishes two papers that examine the potential for a new generation of consumer intermediaries to transform how people engage with complex and essential markets, and help drive competition in a more effective way than the conventional approach to switching has managed.
Adam Scorer, Director of Consumer Futures said:
“Trying to fine-tune markets like energy and high street banking and make them more competitive by unleashing a surge of consumer engagement can seem like a fool’s errand.
“Regulators and others often point to widespread consumer inertia and mistrust to explain, at least partly, a lack of competitive edge in complex markets. More often than not the solutions offered to make these markets work a little better are through improved information, or more effective switching processes All of which leave the onus firmly on the consumer to do the legwork.
“Such market reforms are necessary and important, as are more fundamental reviews of market structure and operation. But there are signs of an important and alternative route to consumer engagement which exploits the potential of cheap computing power, consumer access to usage data and the desire of consumers to get more while doing less.”
Next Generation Intermediaries (NGIs) are services that enable consumers to get better outcomes from complex markets by doing very little themselves – effectively outsourcing engagement to a new kind of intermediary service that works on their behalf. They would empower any consumer who lacks the time or inclination to trawl around for a better energy, financial services, or mobile phone package to instruct the intermediary find the offer that best meets the consumer’s declared criteria, and then to instigate and oversee the switch for them.
“These reports reveal the emergence of such services, examine their potential as an additional route to consumer engagement that can make switching more convenient and more effective, articulate the opportunities and risks for consumers and begin to explore what the response of regulators and policy makers should be.”