Between indigestible and unfathomable

Despite their growing volume of words, banks’ annual reports remain “ ...communication among the financial elite in the language of the financial elite”

Andrew Haldane, Chief Economist of the Bank of England, argues that “indigestible and unfathomable” communications are perpetuating a “Great Divide” between the perceptions of producers and consumers of financial services”.

Mr. Haldane made newspaper headlines when, in the same speech, he said that, while he considered himself reasonably financially literate, he could not make the remotest sense of pensions and that financial advisers didn’t have a clue either!

It made good media copy but, regrettably the main thrust of his speech about public trust in bankers is reflected by the low esteem bankers, and others in the financial services sector, are held by the general public. The consequence, of course, is an unwillingness of investors to break their unshakeable confidence in property and allocate their assets across a portfolio of investments that includes the wide range of pensions, funds, bonds and equities available to them in order to reduce their risk.

Financial sector fissure

Mr. Haldane concludes that the inaccessibility of communications and annual reports produced by banks, and indeed his own central bank, has helped create the “Great Divide”; a fissure of trust between financial insiders and outsiders the healing of which is retarding the financial sector’s progress in regaining its social license with the public.

Haldane accepts that the reason so many members of the public find finance difficult is - because it is
difficult! Although he also suggests that it is sometimes made deliberately so, it is more likely banks neglect of financial writing, that undermines its accessibility and impact. He concludes, “Words matter”.

His evidence that banks’ annual reports are unlikely to be accessible to the vast majority of the general public is the more compelling for being objective. He subjected his own speeches, Bank of England communications and banks’ annual reports to tests based on the work of Claude Shannon, the author of A Mathematical Theory of Communication.

Financial elitism

The tests concluded that banks’ annual reports ranked high on the scale of linguistic complexity, well above the language of broadsheet newspapers that he implies is a reasonable level of accessibility.

This led to Mr. Haldane’s conclusion that bank annual reports are, “...communication among the financial elite in the language of the financial elite”. And a chest-beating mea culpa that, “…the vast majority of the Bank’s (Bank of England’s) publications may be inaccessible to the vast majority of the general public”.

But Mr. Haldane does not believe that resolving linguistic issues through the careful drafting of financial documents is the end in itself. He goes further: he maintains that accessibility of language leads to the renewal of trust with those who financial institutions serve. And thus, by building this elusive, “social capital” (“brick by brick, bank by bank, policy by policy, word by word“) banks can narrow and eventually closing the “Great Divide”.

Banks, financial institutions and corporations devote huge resources to building their brand; making it accessible, appealing, ensuring it conveys trust and supports their reputations. Yet, their verbal branding, the words and the system of language behind the brand are frequently neglected.

For a lot of people a brand is a logo, which of course it isn’t. Words are the components. The writing, language, tone of voice that sustains a brand are the tools. The way they are used is the brand strategy that can mean the difference between mere brand recognition and a brand being embraced by the public.

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