18 September 2023

Why financial firms should finally slay the jargon

legal design
regulatory updates

Back in 2016 the FCA told companies to simplify their comms. If you’re still wrestling with that, we’re here.

It’s nice to feel like a hero at work. Maybe you cleared your inbox, or managed to do a tea round between back-to-back meetings. But what if you could do something today that would transform the way your customers feel in future, safeguarding your company’s reputation and keeping it on the right side of your industry’s regulatory body? The Financial Conduct Authority (FCA) threw down the gauntlet with its FS16-10 report seven years ago. All you need to do is follow through on it.

What is it?

Released back in the mists of time, the FCA’s FS16-10 report is a rather lengthy document that tackles how financial services firms communicate with their customers. Its mission was to improve transparency, enhance comprehension, and ultimately, ensure consumers make informed decisions. And we’re all for that.

Why it matters.

At its heart, FS16-10 was the FCA’s attempt to make sense of the financial industry’s babble. It was commissioned in response to widespread concerns about the complexity and inaccessibility of information shared by financial services firms. It was like trying to solve a cryptic crossword in the dark ­(or untie a Gordian knot, if we’re sticking with the myths and legends theme) – not fun, and definitely not fair on the consumers.

Happily ever after?

Since the report was published, the FCA has been actively working with firms to put the recommendations into action. And while some firms immediately took up the good fight, overall progress has been a little slow.

That said, there have been various initiatives aimed at simplifying language and promoting more effective communication. You might have noticed companies ditching complex financial jargon for plain English, implementing better segmentation strategies to personalise communications, encouraging more two-way dialogues with customers, and utilising tech tools to demonstrate financial products and concepts.

Additionally, the FCA has upped its supervisory duties, ensuring firms toe the line. Non-compliance isn’t taken lightly, and companies have faced enforcement actions for failing to meet these new communication standards.

In a nutshell, FS16-10 has gone some way to slaying the jargon that terrorises innocent consumers. But there are many who have so far resisted the challenge. In particular, legal documents and contracts can be particularly tricky, with their dark dungeons or small print and industry-specific terminology. You wouldn’t want to go in there alone, so if you want help to rewrite them in a way that’s accessible and compliant, talk to us here.

5 key take-outs from the report.

We’ve picked out five areas we believe could drastically improve your business’s ability to engage with its customers through better comms. Here we go…

Keep It Simple, Stupid (KISS): The FCA suggests some financial companies have been trying too hard to impress with their sesquipedalian tendencies (that’s fancy speak for “using big words”). Customers want simplicity. So slice through the jargon. Bring in the plain language. Be a little less War and Peace and a little more Hey Duggee.

One size does not fit all: Like a suit of armour three sizes too big, communication that doesn’t fit your audience is a disaster. The FCA found that many firms just aren’t reading the room (or rather, the customer). Age, tech savviness, financial literacy and more – all of these play a part in how well your message lands. So, spend some time understanding your customers before firing off those emails or app notifications. And don’t forget your legal documents too.

Can we talk? The importance of dialogue: A chat isn’t just for Saturday night at the pub. The FCA found that customers often feel more engaged when they can have a back-and-forth with their financial services provider. This isn’t a lecture. Open up the floor. Encourage dialogue. It’s not just good practice; it’s good business. You might be surprised what you learn when you stop monologuing and start listening. That’s why listening is one of our core principles.

Show, don’t tell (especially with tech): In the world of finance, showing is way more effective than telling. Got a new app for tracking investments? Don’t just write a three-page manual; use video walkthroughs or interactive tutorials. Put simply: your customers will thank you for not wasting their time with lengthy written instructions.

Don’t forget, engagement is half the battle: Ok, this is our own addition, but we think it’s an important one. We could have written this as a simple digested read of the FC16-10 report. But you might have been snoring before the end. And if people don’t read your info – especially your legals – they won’t know what they’ve signed up for. Extended metaphors don’t work for everybody, but they can help to make your message memorable. Test different approaches to keep it fresh and suit different needs.

So, finance firms, it’s time to embrace the challenge and finally cut through all that twaddle. With the right help, even the most convoluted terms can be reworked in a way that supports the customer and your bottom line – just like these simplified terms of business. And if you ignore the sage advice in the FS16-10? Well, let’s just say the FCA’s regulatory hammer won’t be lenient with those who insist on opaque or downright bamboozling messaging. Better take action now, because ‘there be dragons’!

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