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Financial jargon 'drives customers away' from banks
Customers are being driven away from banks and building societies who bombard them with financial jargon, new research backed by the treasury has found.
Three-fifths (60%) said they were likely to stop saving with a particular bank or building society is they could not understand the terms and conditions, while more than half said confusing language could prompt them to switch banks, the study by National Savings and Investments (NS&I) found.
Julian Hynd, director of retail at NS&I said it was clear that customers are being bombarded with financial jargon but it was essential information that is relevant too them.
'Confusing' financial jargon explained
New research suggests financial jargon could be driving customers away from banks and building societies.
Here are definitions of the terms that prove most confusing for customers.
- FSCS stands for Financial Services Compensation Scheme. This is a safety net for people whose bank or building society goes bust that will compensate a consumer by up to £85,000
- AER stands for the annual equivalent rate, which is used to help people compare returns on savings accounts means
- Bacs is a central payment system used to process several different types of electronic payment, such as wages and pensions
- Gross interest refers to interest that is paid before the deduction of tax
Banking customers 'bombarded' with financial jargon
Consumers are being "bombarded" with financial jargon by banks and building societies, according to the director of retail at National Savings and Investments (NS&I).
While new research has found that jargon is driving customers away from banks and building societies, Julian Hynd said it was important for people to check the information supplied to them.
He said: "It's clear that customers are being bombarded with financial jargon, not only from their bank/building society but other financial service providers too."
He added: "But it's important for customers to remember that although the information supplied to them won't be a riveting read, it will provide essential information relevant to them."
Financial jargon 'drives banking customers away'
Financial jargon is driving customers away from banks and building societies, new treasury backed research has found.
Three-fifths (60%) of consumers said they are likely to stop saving with a particular bank or building society if they cannot understand the way they explain their terms and conditions, according to the study by National Savings and Investments (NS&I).
More than half (54%) said confusing language would make them consider switching their custom to another firm.
Call centre staff were responsible for 41% of consumer confusion, while almost half (49%) said terminology in application forms had left them baffled.
Jargon used on company websites had also confused 50% of those polled. One quarter (25%) said they had stopped saving with a particular bank or building society as a result of website jargon.