What do Bank of America, BB&T, CapitalOne, the Department of Treasury Credit Union, and many other financial institutions have in common? They are all using the standardized Financial Privacy Model Notice that was developed and tested by Kleimann Communication Group and released January 1, 2010.
Here we share the six leading practice design themes that led to the development of the model notice with the hope that these practices will be helpful to those developing financial notices or disclosures. It is also our hope that these leading practices will help to advance or assist those working within the fields of plain language, information design, consumer research, and others concerned with creating information that people can both understand and use.
Financial institutions can read briefly about the research project and download the form builder to customize the model privacy notice to fit its practices at the FTC project website. Other institutions who may still plan to use or develop their own financial privacy notices can use these leading practices to inform the development of their notices.
The tendency in the design development of any complex information product is to say too much, to let design decorate, to attract attention at the expense of balance, to provide the specifics without a context, and to standardize without discrimination.
The Model Notice is comprised of four key components: Title, Frame (key and secondary), Disclosure Table, Opt-Out Form. Each component contributes in multiple ways to the overall effectiveness.
Key Frame-Provides context, key details about personal information, sharing practices, and laws relating to sharing practices (Why?, What?, How? section). This section helps ensure comprehension.
Disclosure Table– Provides the seven basic reasons an institution can share information and how this particular institution shares information. It identifies whether a consumer can opt out and shows both what ANY institution can do and what this particular institution does. It also allows consumers to compare across institutions. It is the heart of the disclosure.
Opt out form-Identifies how this financial institution allows consumers to opt out of particular kinds of sharing if the institution’s sharing triggers an opt out.
Secondary frame– Displays a series of FAQ’s, legally required information and more definitions of terms from page 1. Together with the information on page 1 and the opt out form, the notice addresses all legally required elements.
Communication leading practices incorporated by the Model Notice include:
1. Keep it simple. Our research shows that consumers are overwhelmed by too many words, complex information, and vague verbiage. In fact, when faced with complex information, they often won’t even bother to read. The development of the model notice focused on minimizing burden on the consumer by continually simplifying the notice. We stripped away redundancies, reduced words, used simpler words, clarified meaning, and provided key context information up front. At the same time, we did not oversimplify. A notice that strips away all contextual information will be short, but uninformative. The challenge is to find the balance between as few words as possible and relevant and sufficient information so consumers understand what is being conveyed.
2. Good design matters. Good design delivers important information in a format that reinforces the content. Our research shows that consumers responded positively to the table design, headings, white space, bold text, bulleted lists, a larger font size, and full-sizepaper. These design techniques, combined with the simplified content, help consumers better understand the information. They recognized that it looked different from other privacy notices, commenting that it was easier to read and looked more inviting. The easy-to-read design creates the impression that financial institutions want the information to be read and understood.
3. Careful design decisions ensure neutrality. The point of privacy notices is to provide information to consumers without directing their decisions. These notices need to deliver information about financial sharing practices in a way that reports the information truthfully and objectively. We therefore focused on using factual language, objective presentation, and non-inflammatory words. In each round of testing, we listened for comments, reactions, and perceptions from consumers that indicated areas of potential bias in the notice. The iterative testing process allowed us to make design decisions that led to a final notice that is intended to be clear, neutral, and unbiased.
4. A “whole-to-part” design is critical to comprehension. Our research showed that consumers needed a context for understanding the information in the notice. Most consumers do not have an operational understanding of financial information sharing. Therefore, the notice needed to provide enough context that consumers could understand the detail both at the general level and at the table level. The key frame component provides a context about financial sharing laws and personal information so consumers can understand the disclosure table. The disclosure table frames the bank’s sharing practices by giving reasons financial institutions can share information. Consumers can then distinguish and understand the specific sharing practices of their bank and compare it to other institutions. Consumers need the context of both the whole and part to understand the critical details. Without context, they understand virtually nothing.
5. Standardization is highly effective. Standardization of form and content helped consumers recognize the notice and the information in it. As they became familiar with the model notice format, consumers learned where to look for the differences between financial institutions and their sharing practices. Standardization reduces cognitive burden because consumers recognize the information without having to continually re-read notices word for word.
6. The disclosure table is critical. The disclosure table is the heart of the model notice. It shows consumers how their personal information might be shared, how their particular institution shares it, and what sharing consumers can limit. Simple, concise, and highly visual, the standardized disclosure table simplifies highly complex and mandatory information into a design that consumers can understand without undue burden. Our research shows that consumers preferred the standardized disclosure table, could understand the disclosure information with greater ease than with a full prose design, and could compare accurately sharing practices across financial institutions. The disclosure table, with its whole-to-part structure, is critical to consumer understanding and comparing financial sharing practices.
Ultimately, more research will inform the field of effective notice design and development to make these documents truly consumer-centered. If you have comments or additional research to share, we look forward to hearing from you.
To view the final report, Evolution of a Prototype Financial Privacy Notice: http://www.ftc.gov/privacy/privacyinitiatives/ftcfinalreport060228.pdf