The finance industry has a fundamental communication problem that creates unnecessary barriers between service providers and their corporate clients. Research shows this isn't just frustrating—it's costing businesses real money while undermining the strategic role of corporate treasury teams.
Let's start with a concrete example. Here's a recent excerpt from a bank’s FX Daily commentary:
"We're neutral/slightly bearish on the dollar... High-beta Norwegian krone remains one of the G10 high yielders... USD/CNY grinding down towards the 7.10 region."
What actionable guidance can a company CFO looking to manage their risk and liquidity extract from this? The jargon—"high-beta," "G10 high yielders," "grinding down"—assumes specialized trading knowledge that most company finance professionals don't possess. The same concepts could be communicated clearly: "We think the dollar might weaken slightly... Norwegian currency pays higher interest but is more volatile... Chinese yuan will probably strengthen against the dollar."
Bank research reports consistently demonstrate this pattern. They're written for traders and fund managers, not the CFOs and treasury professionals who actually need to make business decisions based on currency exposure. The language assumes you live and breathe derivatives markets rather than running a company that also wants to manage important FX and other financial risks.
The treasury communication problem isn't just anecdotal—it's quantifiable. According to HSBC's 2024 Corporate Risk Management Survey of over 800 CFOs and senior treasury professionals, while 68% of senior finance leaders believe their treasury plays a key role in strategy decisions, 63% say communication between treasury and the C-suite is only "moderately effective." More telling: only 4% of respondents deem treasury-bank communication "highly effective."
This communication style isn't accidental. Complex terminology serves several functions for financial institutions:
Differentiation through complexity: Jargon makes products harder for corporate clients to compare across providers, reducing competitive pressure on pricing and service quality.
Expertise positioning: Complex language reinforces the provider's specialized knowledge while positioning the client as needing professional guidance—often at premium pricing.
Audience prioritization: When bank economists write for "sophisticated" clients, they're optimizing for the small percentage of institutional investors rather than the broader corporate client base.
Academic research supports this view. Studies show that deliberately complex financial language can "coax people into accepting risks that they would not, if fully informed, consent to bear." Financial opacity often serves the provider's interests more than the client's.
The contrast becomes clear when examining publications that prioritize clarity. The Financial Times and The Economist routinely explain complex financial concepts in accessible English. They respect their readers' intelligence without drowning them in insider terminology.
My own understanding breakthrough came from Philip Coggan's "The Money Machine"—finally, someone explained how financial institutions actually work and what they're optimizing for, using clear language that built understanding rather than mystique.
The communication crisis extends beyond language to fundamental user experience problems. Even when finance teams understand what needs to be done, actually executing risk management is a fragmented nightmare.
The ideal corporate FX risk management process should flow seamlessly:
In practice, this becomes a disconnected obstacle course:
Your ERP produces "net FX exposure by subsidiary" but doesn't distinguish between actual vs. budget exposures, committed vs. forecast transactions. You have data, but not insight.
Export everything to Excel, manually clean and organize the data, build your own risk models, and calculate metrics that may or may not reflect your actual risk profile. The terminology here is dense: "value-at-risk," "correlation matrices," "confidence intervals"—all while working in spreadsheets that break when someone adds a row.
Determining hedge ratios, timing, and instrument types requires navigating more jargon: "forward points," "option premiums," "collar structures." Each currency often requires separate conversations with different bank traders who each speak their own dialect of financial complexity.
Call Bank A for EUR hedging, Broker B for USD exposure, email confirmations back and forth, manually enter trade details into multiple systems. Nothing connects to anything else. Every handoff introduces potential errors and delays.
Month-end reporting means pulling data from your ERP, your hedge accounting system, and individual Excel files to demonstrate compliance and effectiveness. Documentation requirements are strict, but the tools to maintain them are scattered and manual.
Each stage involves different terminology, separate systems, and manual handoffs. The user experience is so fragmented that many companies simply accept FX risk rather than navigate the complexity of managing it properly.
This communication and UX breakdown has measurable business consequences. Broader research on workplace communication shows that miscommunication costs US businesses an estimated $1.2 trillion annually, according to Grammarly's 2024 State of Business Communication report. While this figure encompasses all industries, financial services communication problems contribute significantly to these costs.
For treasury specifically, the impacts include:
Operational inefficiency: Manual processes and unclear guidance slow decision-making and increase the risk of errors.
Suboptimal risk management: Companies that can't easily assess and act on their FX exposure often end up either over-hedged (wasting money on unnecessary protection) or under-hedged (accepting avoidable risks).
Missed opportunities: Complex, jargon-heavy communications can obscure market insights that might inform better business decisions.
Staff frustration: Finance teams spend excessive time decoding communications and wrestling with disconnected systems instead of focusing on strategic analysis.
The treasury communication gap creates a vicious cycle: poor communication leads to suboptimal decisions, which create costs that could have been avoided with clearer guidance and better tools.
The research demonstrates that better communication drives measurable business results. McKinsey studies show that companies with effective communication strategies outperform their competitors by 3.5 times, while effective communication can lead to a 72% increase in productivity among business leaders.
Government initiatives demonstrate this. When the SEC implemented its plain English requirements for financial documents, it showed measurable improvements in clarity and comprehension. Organizations that have revised complex documentation using plain language principles consistently report dramatic reductions in customer confusion and support requests.
Successful fintech companies like Stripe built competitive advantages specifically through clear communication and superior user experience. Stripe's documentation clarity and transparent pricing enabled rapid adoption, while Square simplified complex payment processing for small businesses through intuitive interfaces.
The key principles are straightforward:
This communication crisis is exactly why we built HedgeFlows with a fundamentally different philosophy. Instead of perpetuating jargon-heavy, system-fragmented approaches, we asked: What would financial risk management tools look like if they were designed for the people who actually need to use them?
Our FX Risk Assessment widgets (widgets.hedgeflows.com) demonstrate this approach:
The response from corporate finance teams has validated this approach. When tools respect users' intelligence and provide clear information, better decisions follow naturally.
Corporate finance teams don't need to accept unnecessarily complex communication or fragmented user experiences as inevitable. The problems are real, but so are the solutions.
Demand clarity: When financial service providers use excessive jargon or offer unclear guidance, push back. Ask for explanations in business terms you can actually use.
Expect integration: Systems that don't talk to each other aren't sophisticated—they're poorly designed. Modern technology makes seamless workflows possible.
Choose better tools: Providers who prioritize clear communication and good user experience are increasingly available. Vote with your business.
The financial services industry has the capability to communicate clearly and design better tools. The question is whether providers choose to prioritize their clients' success over their own information advantages.
Managing financial risk is challenging enough without having to decode your service providers' communications and wrestle with fragmented systems every step of the way.
Corporate finance teams deserve tools and services that respect their intelligence, provide clear guidance, and support efficient workflows. When providers resist this approach, it often signals that their interests aren't fully aligned with their clients'.
The good news? Clear communication and better user experiences aren't just possible in financial services—they're increasingly available for teams ready to demand better.
Experience the difference that clear communication and intuitive design can make. Try our FX Risk Assessment tools at widgets.hedgeflows.com and see what jargon-free financial risk management feels like.