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A short article by Boglárka Keömley-Horváth, Compliance Expert at OTP Bank

When designing customer documents, service providers need to find the right path between customer preferences and regulatory expectations, which is becoming increasingly difficult due to non-readers and growing regulatory expectations. This study reveals the difficulties in creating such documents and helps back office staff make decisions in line with relevant research.

Surely many people are familiar with the video, in which a man reads out Amazon’s terms and conditions consisting of 73,198 words for almost 9 hours. [1] The example is extreme, but service providers have to provide information to the customers based on more and more legal provisions aimed at properly informing customers, while more and more researches show that customers actually rarely read the various information and conditions. A study examining the behaviour of the Z generation showed that 67% of the youngest adult generation does not read the terms of the contract (and this is a more favourable result than the results of other similar pieces of research). [2] So even though informing customers would be in their best interest, most information doesn’t achieve that aim because it isn’t read at all, and the reason for this is the info dump rushing at customers.

The European Commission has reached similar conclusions, as a study[3] has shown, inter alia, that the use of the following methods can help consumers to perceive the provisions:

– it’s more effective when customers are forced to scroll through terms and conditions than giving them the choice to open (or not open) them,

– shortening and simplifying the terms and conditions results in improved readership and understanding,

– and last but not least the European Commission has found that more and more people read the rules if the service provider indicates in advance how long it will take to read it (cost cue).

Proper wording of customer information not only serves the interests of customers, but it is also extremely important for service providers themselves to have them properly prepared. This is due, on the one hand, to comply with legal requirements, under which several pieces of legislation require the publication of a simple, transparent and comprehensible service. In addition, from a business point of view, it is not negligible for the service provider to persuade its customers to take certain steps. This could be, for example, consent to the processing of certain of their data.

It is well known that personal data has a measurable monetary value for service providers. In addition to the relevance of advertisements, data is also of paramount importance in the personalization and development of products. The specific value of individual personal data has already been determined by several pieces of research, including Mackeeper[4], giving specific numbers at the end of its analysis.

In addition to complying with legal provisions, service providers should take into account the so-called lessons of ‘nudge theory’. In their 2008 book Nudge: Improving Decisions about Health, Wealth, and Happiness, economists Richard Thaler and Cass Sunstein state that due to human beings’ cognitive biases, we can deliberately design how information/choices are presented to individuals, and hence influence their behaviour. The starting point of the theory is that people generally strive for simplicity, are able to concentrate for a limited time, and are willing to act contrary to their original ideas in order to avoid complications. The ‘nudge theory’ has been examined in several studies, notably the results of special research in the financial field. [5] This ground-breaking phenomenon can be used to drive future strategies.

It is crucial that service providers find their way through the maze of transparent and legitimate information and awareness-raising methods proposed by ‘nudge theory’.


[1] Man takes 9 hours to read Amazon Kindle terms and conditions

[2] Dr. Makkai Júlia Anna, Szőcs Izabellea: A Z generáció viszonyulása az adatvédelemhez

[3] European Commision: Study on consumers’ attitudes towards Terms and Conditions (T&Cs) Final report

[4] Most Desired Data: Whose is the most in demand, and how much is it worth?

[5] Nudging the financial market? A review of the nudge theory


Join us at the 13th Annual Operational and Back Office Excellence Banking Summit on 27th – 28th April 2022 in Vienna to hear the presentation on Fraud Prevention in the Scoring Process presenting by the OTP Bank expert.


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