About Time: Banks Make Disclosures Understandable

Bank of America recently joined other banks such as Chase and Citibank in adopting the simplified disclosures advocated by Pew’s Safe Checking in the Electronic Age Project. The project recommended a single page disclosure, but Bank of America, like many other banks, has created a two-page version of the disclosure. Here’s the first page from Bank of America:

My take: Big banks take a lot of heat in my blog for their poor customer experience, as they often fall near the bottom of the Temkin Experience Ratings. But I want to applaud these banks for doing the right thing, making it easier for customers to understand the details of their products. It’s great to see these large banks let go of approaches that either try to hide potentially disadvantageous terms or succumb to requirements for legalese from overly conservative legal departments.

This move is not only good for consumers, but it can be part of an overall change that will be very good for those banks as well. If they continue to make inroads into other areas of customer confusion and struggles, banks are likely to be rewarded with more loyalty, as you can see in a graphic from a recent post, Customer Experience Isn’t Enough in Banking.

The bottom line: Confusing your customers is never a good long-term strategy

About Bruce Temkin, CCXP
I'm an experience (XM) management catalyst; helping organizations improve results by engaging the hearts and minds of their employees, customers, and partners. I enjoy researching and speaking about these topics. I lead the Qualtrics XM Institute, which is the world's best job. We're igniting a global community of XM Professionals who are inspired and empowered to radically improve the human experience. To achieve this goal, my team focuses on thought leadership, training, and community building. My work is driven by a set of fundamental beliefs: 1) Everything starts and ends with human beings, so you need to understand how people think, feel, and behave; 2) XM is a discipline that needs to be woven throughout an organization's entire operating fabric; and 3) Building the XM discipline requires a combination of culture, competency, and technology.

One Response to About Time: Banks Make Disclosures Understandable

  1. Judith Weader says:

    Many large banks have difficulty fostering loyalty because they lack the ability to show it themselves. Credit has tightened considerably in the last five years, and large banks are lending less and less, reducing credit lines for business and individuals alike. On the other hand, credit unions appear to enjoy rather high experience ratings across many studies, often because they take a more human approach to their customers – seeing them as “members” deserving of individual attention. Additionally, cheaper access to tech is allowing credit unions to offer big bank-level web sites and mobile services to its customers, meeting big banks at the baseline of higher tech requirements while upping the game on the personalized experience. It’s great that large banks like BofA are complying with federal regulations that require more simplified communications, but until they up their game on the overall experience, they’ll continue to lose ground (or at least not gain it) in a market where expectations continue to increase. If you can’t win based on a differentiated experience play (credit union is more personalized), and you can’t win based on a variety of products & services play (credit unions offer the same services and tech), then your next bet is to compete based on price – and big banks are adding/increasing fees, even as they remove layers of opacity around what those fees are for. It will be interesting to see where this all goes over time. What we need here is a round of innovation in the products & services, which is a tall order for an industry traditionally built upon – and lately overzealously renewing its faith in – risk management.

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