Sometimes using a bank means having to swim through a choppy sea of acronyms, initialisms and bizarre words.
Mortgage terms and conditions can be the financial equivalent of translating Ancient Sumerian scripts, and pointing out a word you don't understand can be embarrassing for some. We like to call this language "banklish".
Seeing as people struggle to tell their AER from their APR, we decided to ask the nation its views on financial jargon. We spoke to 1,000 people in the UK about which banking terms they know, which they don’t, and how they feel about the dreaded jargon.
Nearly two in five (42%) people admitted to having a sub-par understanding of financial jargon and almost a third (31%) have signed a financial contract without comprehending some or all of the terminology.
As part of the survey, participants were given a list of real and imaginary finance terms and asked to decide which was which. . More than one in 10 didn’t believe ‘credit rating’ was a real term, while almost half (48%) thought ‘IVA (Individual Voluntary Arrangement)’ was made up. Of the imaginary jargon, nearly a quarter (23%) believed ‘core gouging’ was real and nearly one in three (31%) accepted ‘Annual Sorting Rate’ as actual terminology.
Banklish is clearly confusing, so much so that the vast majority of people (81%) want to see the government take action regarding the amount of jargon used by banks. What’s more, one in three people (37%) put less trust in a bank that over-uses banklish.
There’s no quick fix for this, but if you’re unsure about the words in a contract or any other financial document, you shouldn’t be afraid to ask. As you can see, you’re definitely not alone in this, and it’s better to be safe than sorry.
While this is a pretty dim view on the state of plain English from our nation’s banks, we’ve created something that brings a little fun to the weird world of financial terminology: The Great Finance Jargon Quiz. Can you sort the real jargon from the fake? Have a go at https://www.nortonfinance.co.uk/know-how/the-great-finance-jargon-quiz and share your results with your friends.