3 minute read

At a recent Digital Espresso session, CEO of CrowdEmotion Matt Celuszak highlighted the importance of consumers’ feelings in commerce, and discussed how technology can be used to understand the economics of emotion.

Emily Haisley, our resident Behavioural Economist at Lloyds Banking Group, explains why our emotions are still so important in the digital world.

It’s no secret that emotion plays a big part in our decision-making. From small, everyday choices such as what to wear and what to eat, to life-changing decisions like owning a house and starting a family, the way we feel is central to nearly everything we do. In fact, people with lesions, or injuries, in the emotional centres of their brains can struggle to make even the simplest decisions, such as what to eat.

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It’s why businesses use emotive marketing to draw consumers in – whether it’s cute puppies, adorable babies, or sex appeal. But even with our increasing immersion in various technological devices, be it a smartphone, laptop or tablet, we can still experience connections and emotions through digital channels. Studies have shown the “love” hormone (oxytocin), which is released when mothers and babies bond and is associated with trust, generosity and empathy, can actually increase when people use Facebook and Twitter.

Now, technology is being used to deliver clearer insight into our emotionally-led behaviour. Using analysis of facial muscle activation it’s possible to determine the value that emotional information has on users, and this can help businesses deliver digital experiences that better engage users and help drive decisions.

Celuszak demonstrated this with a willing volunteer, whose emotional reaction to a BBC drama was analysed. The experiment revealed that having the emotional read of a reaction to a piece of content (which is impossible to fake and often unconscious) in addition to verbally reported reactions was invaluable.

So how can this technology help banks? Firstly, emotion recognition technology can take customer testing to a whole new level as we add what customers feel to what they say. More practically, this technology could even move out of the lab to observe customer’s emotional reactions in real-time to online and mobile banking. Through web cams, real time emotional experience data could be interpreted as people bank and assistance offered if they express anger or distress.

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There are also many potential applications coming out of the new field of neuro-economics, which studies people making financial decisions while their brains are being scanned. Emotions subconsciously influence our decisions in ways we are just beginning to understand. For example, anger makes us more prone to take risks because it is accompanied by feelings of certainty and control. This over-confidence can cause us to make rash decisions and take unnecessary risks – which can have significant consequences if we are angry while investing for example. Emotions can also have positive effects. Disgust conveys a true premonition that an asset bubble is about to burst and is therefore associated with higher investment returns.

Thanks to new software it’s increasingly possible to better understand and manage customer expectations based on their emotions to give them a better banking experience. As we start to learn more and more about the science of emotions, we can use this technology as another way to help our customers.

Digital Espressos are 30-minute talks from either internal or external speakers with expertise in different areas of digital, ranging from Internet of Things to AI. These sessions are an important part working at LBG and help us learn about changes in the wider digital industry, keeping up with what different organisations and individuals are doing in this space. This helps to get our teams thinking outside of the traditional financial and banking realms as we do our best to become the best bank for our customers.

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