Modern banking terminology is so much of a head f*ck one expert reckons you would need an A-Level standard qualification in maths just to know what the hell is going on.
Around 76% of the British public admitted to being baffled by some of the common banking terms used, while around 86% felt they were unable to make informed decisions about their cash supplies as a result.
Based on research commissioned by Tandem Bank, the study also saw Dr Christian Yates of the Department of Mathematical Sciences at the University of Bath create an exam-style paper that used real life scenarios to illustrate the complexities involved for banking customers.
Dr Yates said: “The general public requires a consistently high level of mathematics to understand and make sense of some fairly common financial situations.
“Not only do they have to get their heads around the myriad terms and acronyms that banks use, but they often need to have A-Level standard maths to accurately understand the ramifications of banking products, or simply how to best manage their finances.
“Even at degree level, students would struggle with some of these problems which require long, complicated calculations.”
Meanwhile, around 79% of those reponded with a credit agreement like a mortgage, loan or credit card, admitted to having no understanding of APR.
That figure includes us: it’s the cost of credit on a yearly basis, highlighting the need for more transparency in everyday banking situations.
Based on a survey of 2,000 Brits, the top ten banking terms that leave people scratching their heads were:
- MICR code – 96%
- Offsetting – 89%
- Deferred payment credit –85%
- Representative APR – 79%
- Fixed-rate bond – 75%
- Cash flow statement – 73%
- Debt consolidation – 72%
- Base rate – 60%
- ISA – 59%
- Balance transfer – 43%
Maybe it’s time banks slowed things down a bit because a lot of this is going over our heads.
Loaded staff writer Jack Beresford has produced content for Lad Bible, Axonn Media and a variety of online sports and news media outlets.