2 thoughts on “Redesigning mortgage statements”

  1. Yes, a brilliant piece. And for that matter applicable to many other things like superannuation statements, or strata statements, electricity bills, water bills, and what not. 

    Surely, as demonstrated by the guys from HiD, designing understandable and transparent statements is not rocket science and I would like to think that firms know that. So the question is: Why do we see what we see? (Incidentally, it is a small step from poor graphic design to being misleading and deceptive if not by commission then by omission.)

    Me thinkst that the problem is with banks and other actors in other service industries believing that schmeduling is profit maximizing. Indeed that might be so in the short run; it is an interesting question to what extent reputational feedback (systems) could overcome this problem and reward the transparent actors …  I have little doubt that regulatory interventions will not do the trick.


  2. Joshua, Tristan from @humansindesign. I have be a reader of this blog for years (since it was just you) and it’s an honor to be on it even in just this little link.

    Andreas – Thanks for the comment!  As to whether this is intentional or not, I agree the line if a fine one.  

    But the assumption that keeping your customers in the dark is useful might not be right.  This is where the economists should really step in… but I have an opinion that there are at least 2 possible routes to this making money for a bank:

    1.  A bank recognizes that being transparent gives them a competitive advantage so does it to get more market share.  They might even be able to charge a premium for the transparency (eg. see this ny times article on check cashers: http://www.nytimes.com/2008/11/09/magazine/09nix-t.html)
    2.  A bank decides that more informed customers is an advantage through lower risk of default.  This leads to more profit and stability in the longer term.
    3.  Perhaps they will actually gain money because, once people get their loan to a certain point they engage in other activities (eg. more borrowing for renovations, other investments).  Whilst they might get a smaller cut, it might be a bigger (lower risk) pie from richer customers.

    That said – that’s all being glass half full.  My personal gut feel is that getting the banks to do it is not the best way.  The best way is getting some government regulation to provide better access to our data in an easy to graph format.  (Security aside) I’m thinking of a day where I can have an ipad/phone app that can plug into my data with a password.  The TV tells me Westpac has raided it’s variable rate.  In a click I can see, and engage with, interactive graphs telling me what it means. 

    Financial advisers could provide services in setting setting up these visualisations and teaching people how to read them.
    My 2 cents… that hopefully I can help become reality. 


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