Banking Policies Out of Touch with Consumers

Financial institutions are riddled with excruciatingly tedious policies, arcane processes and asinine procedures. Why? Because they are completely out of touch with consumers. Many banks and credit unions claim they put people first, but if that was really true, banking would be a lot more simple and make much more sense.
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Precision and accuracy are valuable qualities — essential, in fact, when cutting diamonds or performing brain surgery. Accuracy refers to how close measurements are to a “true” value, while precision refers to how close measurements are to one another. However, there are times when overwhelming dissection of data becomes tedious and undermines comprehension.

When checking account holders check their balances online, essentially, they are seeking the amount available for withdrawal without going into overdraft. While financial institutions should know this is the only number that really matters to people, many still present several other amounts besides the desired balance.

For instance, my checking provider displays bank balance, statement balance and available balance next to each other. Of these, only available balance really means anything to me. Statement balance? Bank balance? What’s are those? Available balance is actually the only amount I’m interested in. This multiplicity of amounts is symptomatic of what I call being “precisely pointless.”

Do banks think this granularity gives me confidence in their ability to track every penny of my money? Well, it doesn’t. In fact, it makes me suspicious they are deliberately trying to confuse me, and are surreptitiously trying to generate fee income. Research shows that people mistrust fine print and legalese and assume its message will be to their detriment. In other words, if you overwhelm me with data, I have less useful information. Conversely, consumers tend to think that companies who speak in plain English are trustworthy.

Financial institutions tend to think it’s reasonable asking consumers to learn and memorize their internal processes. For instance, take this simple question: “When does today end and tomorrow start?” If you polled people on the street — young, old, educated, varying incomes — nearly all would agree that midnight marks the beginning and end of each day. Not banks. They don’t use midnight, they use multiple cutoff times to define the end of a business day. According to one bank:

“Branches do not have a cutoff time providing a deposit is made on a business day with a teller. However, if a deposit is made on a non-business day, (i.e. Saturday, Sunday, or Federal Holiday), the deposit will be made on the next business day we are open. The cutoff time for ATM deposits and/or transfers is 10 p.m. For transfers made through telephone and online Banking, the cutoff time is 8 p.m.”

The above passage begs an obvious question: “Isn’t Saturday a business day if the bank is open, the tellers are working and I am transacting in person? How can a bank be open on a ‘non-business day’?” This kind of muddled and complex policy shows how banks (1) fail with their consumer messaging and communications, because (2) they lack a consumer-directed perspective. Why have three different cutoff times for ATMs, tellers, phone and online? Why would online transactions have the earliest (and therefore the most punitive) cutoff time, while teller transactions conducted in branches have no cutoff time? Does this make any sense to ANYONE? How do policies like these ever get the green light?

Another bank recently announced that for online account access, “Password” will now be called “Memorable Answer,” but users will also need a new, additional password. Really? Why not simply say it will be more secure by requiring two passwords upon each log in?

3 Tips to Clearer Communication

1. Work from the familiar. Start with what is familiar and expected by customers. People treasure convenience and value companies who show respect for their time. They do not want to learn your policies and procedures; they want you to adapt to their likes and lifestyles. People don’t often follow instructions when assembling something they bought at a store, so they certainly aren’t going to bother looking up and learning a list of your arcane and asinine banking rules. (Hint: If consumers say a day ends at midnight, then your business day ends at midnight too. Why try to retrain and re-educate consumers who are already stressed, frazzled and disengaged?

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2. Rewrite policies to reflect reality. If a hospital knows that its emergency room is busy on the July 4th, it makes sense to increase staffing levels accordingly. They shouldn’t tell people they run a skeleton staff on holidays so it would be better if they blew their fingers off on a different day.

People know that money today moves in the blink of an eye, thanks to technologies like the internet. And yet some banks love to cling to archaic policies claiming delays due to “out of state” banking. Seriously?

3. Test in real-world settings. Don’t test in an empty conference room. Reflect the real-world context of use with a variety of customers so you can anticipate misperceptions. If you have an ATM with a bunch of explanations that pop-up on the screen, you need to test how users respond when a bunch of people are standing in line behind them. You can’t ask consumers to rate the clarity and simplicity of your communications by handing them a pristine page of plain text in an antiseptic focus group. In a real-world setting, consumers aren’t going to have the time to study definitions and explanations to see if they make sense. They will have a few fleeting seconds, while being distracted by the TV, text messages and screaming kids.


Irene Etzkorn is Chief Clarity Officer at Siegelvision based in New York City, a strategic communications firm that gives clients clarity of purpose, clarity of expression and clarity of experience to realize the full power of their brand. Irene believes complexity and the consumer confusion that results creates barriers to progress in the financial services industry. She is also the co-author of the seminal book, Simple: Conquering the Crisis of Complexity.

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