Behaviourlab Pricing Optimsation – NatWest Case Study

Buy Now Pay Later (BNPL) products are expanding in the UK. Most existing providers, such as Klarna, are unregulated and embedded within retailers. However, banks such as Barclays and Monzo now offer BNPL, reflecting an opportunity for regulated institutions. NatWest began to innovate a BNPL product and needed to optimise the pricing and product features to drive usage, revenue, and perceptions.  

A product’s optimal price is affected by the price of surrounding products and competitor pricing, as well as price architecture and presentation. But changes in price can lead to counter intuitive changes in consumer behaviour, proving the need for accurate testing in a safe environment.  

NatWest enlisted Dectech to robustly pre-test prototypes using the rapid version of our Behaviourlab tool. This research: 

• Quantified the impact of pricing (i.e., APR) on usage of a NatWest BNPL product 
• Modelled the interaction between pricing and the number of repayment instalments 
• Converted results into reliable, calibrated revenue, and margin forecasts  

This case study describes how this research approach was successfully implemented, and its organisational and commercial impact at NatWest.