Getting it right for savers and borrowers around the world

Judy Knighton | October 15, 2015

Plain language is an essential part of helping consumers to make decisions, said Colm Kincaid of the Central Bank of Ireland when he presented last month at the PLAIN conference in Dublin.

Read Kincaid’s speech

Parallels between New Zealand and Ireland

The Consumer Protection division of the Central Bank of Ireland administers regulations to safeguard consumers, just as our own Financial Markets Authority does. Consumer Protection faces many of the same challenges, so Kincaid’s speech to the conference is very relevant to our financial institutions and their customers.

Like Ireland, New Zealand’s adult population includes one in six people who have difficulty understanding basic written text. The proportion challenged by financial information is even higher. As Kincaid says:

For financial services (as with other sectors), plain language is not just about words. It is about a cultural desire to make sure your customer understands what they are buying and can access the information they may need later when they need it.

Clear, concise, and effective

In Ireland, the Consumer Protection Code requires that ‘all information [a regulated entity] provides to a consumer is clear, accurate, up to date, and written in plain English.’ In New Zealand, the Financial Markets Authority requires communications that are clear, concise, and effective. Communications…

are clear if they:
* use plain language
* are logically ordered and easy to follow
* highlight important information
* explain complex information in plain language and include a clear explanation of any necessary jargon.

Both countries require full disclosure, presented in a way that does not obscure information.

Kincaid strongly advocates for consumer participation in developing products and communications. We couldn’t agree more. Rather than assuming that those inside an organisation know what the consumer needs and wants to know, and how much they might understand, we recommend you ask consumers. A simple testing regime can make all the difference between successful communication and a complete failure in understanding. The Financial Markets Authority recommends testing, but does not mandate it.

Further information

New Zealand adult literacy statistics (2006; updated figures will be published in 2016)

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