The FCA is exploring the use of eye tracking technology as part of work to clamp down on misleading or harmful financial advertising for consumers.

The regulator published an Occasional Paper today, with academic research looking into how adverts may be unclear or unfair.

The report stated that the FCA is ‘exploring’ how eye tracking technology can understand further how consumers engage with adverts and how visual attention affects decision making.

Eye tracking data is collected using either a remote or head-mounted device connected to a computer.

The FCA paper examines the science of advertising and assesses how consumers are affected by financial advertising, what they pay attention to and when might they be misled.

The authors of the paper stated: “Evidence from studies of visual attention tells us that two main factors matter: salience and motivation.
These factors also help us to identify situations where consumers may miss important information or pay less attention to it and which could therefore lead to harm.

“For example, consumers may miss key information in the periphery of the advertisement. The FCA already requires that all relevant product information, including risk warnings and key exclusions, is sufficiently prominent, and the way it assesses cases is in line with the academic evidence referred to in this paper, including considering the relative prominence of items.

“Top-down attention is difficult to evaluate, since it is not usually possible to identify the circumstances in which a customer sees an advert and the capabilities, experiences and beliefs they bring to it.

“However, the medium used by the advertisement and the target audience may weigh into the assessment of how fair it is. This is reflected in the advertising rules and codes of practice of several organisations, which include reference to “average” consumers and target audience when considering fairness.”

Firms were told that the paper was not guidance on the FCA’s financial promotions rules. The document stated: “Some of the techniques described in this paper could be used to produce promotions that are not clear, are unfair and misleading, and it remains for individual firms to ensure that their promotions comply with the FCA’s rules.”