Financial services communications can sometimes feel like an echo chamber in which the original intention behind all the words gets lost, but only Britain’s financial regulator could come up with a six-letter acronym to underline the importance of speaking with your customers clearly!
Fortunately the Financial Conduct Authority is actually now considering deleting the Consumer Friendly Principles and Practices of Financial Management (CFPPFM) disclosure section of its handbook. Far from empowering your customers to make better decisions, it has tended to lead financial product providers to produce reams of tick-box small print and superficial “explanations” of their products, the FCA now admits.
Not only could the CFPPFM’s bureaucratic moniker have been drawn from the pages of a novel by the bleak satirist Franz Kafka, the irony is that customers don’t often read any of the financial small print at all, so the CFPPFM’s entire purpose – protecting customers – came out in the wash. Welcome to the box-ticking echo chamber.
This example wouldn’t be the first time a British industry regulator has set out to protect customers and further confused them, in the end. But it does appear that the FCA’s new discussion paper on “smarter customer communications” is really serious about improving things, this time.
Has your company considered how it might break out of the echo chamber to empower its customers with smarter communications?
Introducing the paper, the regulator’s director of strategy and competition Christopher Woolard says most financial companies “need to do more to communicate with consumers in a way that truly empowers them to make effective decisions.” He says companies need to “embed an organisation-wide culture where the importance of communicating effectively with consumers is recognised and prioritised.” Mr. Woolard goes further, saying he wants to see firms employ “at least as much behaviourally informed creativity” in the crafting of communications as they do in business development, marketing, and financial promotions.
Those are some fairly ambitious sentences, and at Bulletin, they play to our strategic communication strengths. Rather than simply putting together product-related press material or fine-tuning small print, we help our financial clients carefully consider what they want to do, first, then we help to identify their audiences, before considering the widest possible variety of creative strategies to reach them.
The paper references video content produced by Barclays to explain its mobile banking app, and by Nationwide, to explain the differences between a current account and a savings account, to teenage customers. It also references a series of comics produced by the Australian Securities and Investment Commission to educate young people about the importance of budgeting.
Some options you might consider:
- Using more illustrations and infographics to explain your products, their fees and charges.
- Producing a variety of new customer-friendly video and animated content to reach your customers on mobile devices, tablets, and through social media.
- Printing shorter, less text-heavy terms and conditions.
- Cutting out the jargon in your communications material and replacing it with straightforward words.
The FCA is particularly keen to encourage innovative communications to tackle consumer inertia and lack of engagement when it comes to retirement planning and saving. In this area, “the need for consumers to engage has never been more acute,” says the discussion paper. We couldn’t agree more.
There’s no silver bullet for communicating more clearly in financial services. But the regulator’s interest in this area could serve as a good basis for a strategic audit of your firm’s communications.
Getting out of the financial communications echo chamber could mean you end up writing for the consumer first, and then ensuring communications are compliant, rather than the other way around. It could mean building a wider understanding of your customers’ information needs throughout the life cycle of your products, and then responding to those more strategically. Perhaps most crucially, it may mean testing your communications with real customers to ensure that they’re working, before you roll them out more broadly.
There’s no denying that a culture shift is required in financial services communications to make some of these things happen. But whatever you’re considering, Bulletin can help, and we’re all very interested in tackling this challenge.