Simple works; what's more, it wins. A 2019 study from Deloitte revealed that 36% of US banking consumers chose their primary bank because of its ‘simplicity’  – a concept that organizations should reflect not only in the products and services they offer, but also in the language they use to speak about them. As we learned from industry experts in our latest research report, The Front-to-Back Office Report, clients speak in benefits.
They’re interested in how their lives will be improved by using a new financial offering, not with which complicated-sounding technology it’s achieving that. Moreover, as we’ll come to see, many consumers struggle with financial fluency and having to sift through too much jargon is a major reason for why they would switch to a different bank – making it all the more important to ensure that, as an organization, you’re speaking the right language.
How many people really speak ‘bank’?
The answer is fewer than you might think. In a survey of more than 12,000 individuals across several countries , over half of banking customers report being confused by financial jargon. Japan fares the best, with “only” 58% of respondents perplexed, followed by the US and UK, at 59% and 60%, respectively. At the top end of the scale is Italy, with nearly three in four mystified when it comes to speaking the language of the financial industry.
As is the case when learning any new language in a foreign place, struggling with financial fluency is not only unnerving – it can leave one making uninformed decisions, too. Nearly a third of UK respondents surveyed stated that they signed a financial contract without having understood some or all of the terminology used . The negative impact on customers is enough that, in the same survey , 81% stated that they would like to see governmental action taken against the amount of jargon used by banks.
And, when you see just how difficult some banking texts are to comprehend, you might agree with them. A 2019 report from VisibleThread, a firm specializing in language analytics, looked at the communication materials of the top 50 banks in the US. They found that nearly 60% of content is not readable for the average American . Apparently, reading the content from the worst-scoring banks is comparable to reading an academic paper on chess. The best-scoring banks don’t perform much better, with their material found to be more difficult to read than the 1851 classic, Moby Dick. It’s safe to say that neither should be taken as top inspiration for banking communications.
Why a language barrier is bad for business
As the saying goes, “communication is key”. This rings just as true in the financial industry as in any other relationship, with organizations aiming to create long-lasting connections with clients, built on trust and understanding – which is hard to do when your client quite literally doesn’t understand you. In a world of easy-to-read infographics and character-limited text, banking customers are looking for short, snappy, and simple. And what happens when they don’t get it? They take their business elsewhere.
One in three UK customers find banks that overuse ‘banklish’ less trustworthy and 60% say they are more likely to stop saving with a bank if they can’t understand the language used in the Terms & Conditions . To drive the point home, when asked to list the reasons why they would switch their bank, over half (54%) of customers cited the use of confusing language . It’s clear to see that being lost in translation can lead to losing your customers.
At the end of the day, clients entrust their banks and financial partners with a very important thing: tomorrow. Their savings, the roof over their heads, their children’s education, their retirement funds – and so it only follows that clients want to have a clear understanding of how their future is being handled. As a client’s financial options continue to grow, thanks to new competitors, products, and services on offer, organizations that master the art of straight-forward, no-nonsense communication may find themselves at an advantage, tapping directly into this basic consumer need for clarity and simplicity.
Clients speak in benefits, not technologies
When we talk about the client experience, people quickly jump to ideas around digitalization, mobile apps, personalization – all critical in this day and age, with 81% of investors willing to bank fully digital and over half considering a state-of-the-art mobile banking app to be a must-have .
But it’s worth remembering that all of these technological evolutions need to be built on a fundamental premise: speak your client’s language.
“Customers don’t see technology as technology. They see what they receive from the bank. The customer won’t say, ‘I like artificial intelligence.’ They’ll say, ‘Hey, you’re coming to me with this product at the right time.’ They won’t say that they like biometric authentication, they’ll say ‘Wow, it’s so easy to log into my mobile banking because I don’t need to remember my password.’” A FRONT OFFICE EXECUTIVE
Part of being customer-centric means knowing the language your audience speaks. Customers are most interested to know the benefit to them that your new release provides, not necessarily how it’s doing that. Instead of branding products and services with sophisticated technological terms, remove the guesswork for your clients and focus on tangible benefits and how their day-in-the-life will change for the better. Sometimes, it really is just about the destination, and less about the journey.
For more insight into how end-client needs are evolving, and how the financial industry can keep pace, read Avaloq’s Front-to-Back Office Report. Hear directly from industry experts themselves on key topics like technological innovation and digitalization, challenges with regulation adherence at a global scale, and what skill sets will be needed to succeed in the industry of the future.
Written by Ada Cirlia
Ada is a Consumer & Market Researcher and part of Avaloq’s Marketing team, where she leads our Research & Insights efforts. She works to understand and share the most relevant insights on the financial industry at large – from end-clients to the organizations that serve them. Prior to joining Avaloq, Ada was leading consumer research projects that helped shape the future of brands at Procter & Gamble. She holds an MSc in Economic & Consumer Psychology from Leiden University, as well as a BSc in Psychology from the University of York.
The Front-to-Back Office Report
How should financial institutions react to changing client needs? How will digital transformation change the functions of the Front, Middle, and Back Office? What skills does a team in these areas need for the industry of tomorrow? Read what leading executives in the financial industry have to say on these topics, in our newest edition of Avaloq's Front-to-Back Office Report.