When it comes to financial communications, we often assume our customers understand what we're telling them. The reality is quite different. According to government research, nearly half of UK adults have primary school level numeracy skills, with another quarter at lower secondary school level. This means only about a quarter of the population has the everyday maths skills we'd expect of a 16-year-old.

Financial services professionals often forget that terms, abbreviations, and numbers that seem obvious to them can be confusing or meaningless to their customers. This can lead to additional stress for the customer, or disengagement from the debt collection process. At Plain Numbers, we're working to bridge the gap between communication and understanding by helping organisations communicate numerical information more effectively. Our approach combines three key principles: presenting numbers clearly, providing context, and applying behavioural science insights.

The scale of the challenge

The problem is larger than many realise. While literacy often gets more attention, numeracy challenges affect over three times as many people. This has significant implications for financial services, particularly in debt management and collections.

Poor numeracy isn't just about lacking skills – there's also an emotional component. About one-fifth of the population experiences what we call "maths anxiety," a visceral reaction that can prevent engagement with numerical information, even when they have the underlying capability to understand it.

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Three principles for better communication

Communication can be improved if we focus on three core elements:

1. Behavioural Science: Drawing on insights from Daniel Kahneman's work on fast and slow thinking, we recognise that while we assume people make rational, considered decisions, most actually make quick, intuitive judgments. This has important implications for how we present information.
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2. Number presentation: Research shows there's a clear hierarchy in how people process numbers. Fractions with different denominators are the most challenging, followed by decimals, then percentages. Whole numbers are significantly easier to understand, and the most effective approach is doing the calculations for customers using their own data.
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3. Numbers in context: We all suffer from what Steven Pinker calls "the curse of knowledge" – the difficulty in remembering what it's like to not know something we now understand. This is particularly relevant in financial services, where industry jargon and technical terms can create barriers to understanding.

Practical applications

In the debt collection sector, these principles can be applied to make communications more effective:

• Focus on the most important numbers: What's the key figure customers need to know?
• Remove unnecessary numerical information that might cause anxiety or confusion
• Replace industry terminology with plain language
• Provide clear, specific dates rather than time periods
• Make calls to action crystal clear
• Present complex information in a hierarchy, with the most important details upfront

Proven results

Working with the Bank of England and various market leading firms, we've conducted rigorous trials of the Plain Numbers Approach. The results have been remarkable. Through testing with randomised controlled trials we’ve seen that, on average, double the number of customers understand a communication when the Plain Numbers principles are applied. 

Interestingly, our research revealed a significant gap between perceived and actual comprehension. In our trials, 60-70% of people said they understood the original communications, but actual comprehension tests showed much lower understanding. This highlights why simply asking customers if they understand isn't enough – we need to measure actual comprehension.

Looking forward

As we work with organisations across different sectors, from financial services to utilities, we're building an ecosystem of better communication practices. Our three-year partnerships help embed these principles into business-as-usual operations, creating lasting change in how organisations communicate with their customers.

For those working in debt management and collections, this approach offers a practical way to improve customer engagement and understanding. By making our communications clearer and more accessible, we not only help our customers make better decisions – we also improve business outcomes and meet regulatory requirements.

The challenge of numerical comprehension isn't going away, but by acknowledging it and adapting our communications accordingly, we can make a real difference in how effectively we serve our customers. At a time when the FCA is increasingly focused on the Consumer Duty and vulnerability, making numbers plain isn't just good practice – it's becoming a regulatory imperative.

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Mike Ellicock is the founder and Chief Executive of Plain Numbers, working with organisations to make numerical communications clearer and more effective. For more information, visit www.plainnumbers.org.uk.