Elizabeth Warren has, correctly, made communications transparency the Holy Grail of the Consumer Financial Protection Bureau. Now that the financial reform bill has been signed and a new consumer bureau is on the way to becoming the source and enforcer of transparency rules, it's fair to ask how these rules will affect bank practices. What practical changes in day-to-day bank operations will be required to meet both the spirit and letter of transparency rules? And how much will these changes cost?
As a simplified-communications consultant to financial services companies for 22 years, I believe the expected rules for clear consumer communications provide a rich opportunity for banks to change legacy processes and practices that have long outlived their usefulness. Here are the five areas of bank operations that I predict will be affected for the better by new transparency rules.
Mind-set. Most advertising, branding and marketing professionals among bank staff and vendors are steeped in the principles and imperatives of design rather than writing. The visual impact and integrity of what they produce for clients invariably trumps its substance and clarity. If the communication looks good, the presumption is that it is good. This will have to change and a better balance struck between the quality of content and copy and the quality of design if clarity is to become the primary goal of bank communicators.
Staffing. To create comprehensible credit communications, bank marketing managers will have to add new skill sets and specialties to their teams.
In addition to creative copywriters, they must soon find and recruit content analysts and experts in plain-language writing. Along with graphic designers trained to produce high-impact visuals, they will need the skills and sensibilities of "information designers," a specialized subset of graphic designers trained to clarify rather than beautify content intended for consumers.
Guidelines. Ask any bank for its graphic standards today and you'll get a weighty tome at the click of a mouse. Ask for content or writing guidelines and you'll draw a blank. Design is important and counts for a lot.
But if the content of a brochure or document is wrong, if it is disorganized or rife with jargon and legalese, then the communication misfires regardless of its flawless design. If transparency is to become an important goal of bank communications, then guidelines must be expanded to include rules for content and copy as well as for design.
Governance. Many banks are organized around silos. Managers for different departments work at arm's length of one another and without reference to a common marketing communications standard or plan.
To communicate with one voice, clearly and comprehensibly across product and division lines, banks will have to accept more centralized governance models for their marketing and communications operations. They will also have to move responsibility for functional communications like forms, correspondence, disclosures and statements from IT and operations departments where they presently reside into marketing communications departments.
Process. Beyond marketing and communications professionals, there are many who contribute to the substance and form of consumer communications: legal and compliance officers, systems programmers and operations personnel.
To achieve communications transparency, banks must formulate new creative and review processes that will give all these corporate players their due without allowing any one group to undermine the ultimate goal of transparency they all must now embrace.
These are the changes I predict transparency will require. Now, what will they cost?
There's been a lot of talk about the undue financial burden transparency rules will impose on affected companies. But evidence from simplification, usability and plain-English practitioners across the country suggests quite the contrary. Simply put, clarity costs less — a lot less.
By eliminating nonessential content, an important step in achieving transparent communications, companies typically see dramatic reductions in word, page and document counts, often upward of 30%.
Costly inquiries to call centers because of confusing communications also drop dramatically, as do the costs of postage, storage, fulfillment, obsolescence and handling. A Gartner Group study put the cost of handling paperwork at 30 to 60 times the cost of producing it.
If transparent communications result in fewer, clearer documents, the ripple effects up and down the bank system will be enormous.
In the end, it will take more than new rules to change the way banks communicate with their customers.
It will take a broader concept of the marketing communications function, an embrace of new disciplines and specialties, an acceleration of the trend toward content-centered processes and new governance structures that make communicators and their companies more accountable and collaborative in the service of consumers.
The ultimate result of all these changes — clear financial communications — will be good not only for consumers, but also for bank bottom lines.