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Bank customers best understand privacy and information sharing policies when they are structured as a table rather than as solid text, a study for the US government has found.

Researchers created fake notices and one notice typical of those currently used by US banks and found that the table notice was the best at helping people to understand privacy notices.

US law the Gramm-Leach-Bliley Act (GLBA) requires banks and other financial services companies to provide customers and potential customers with privacy notices.

Researchers were commissioned by the US government to find out whether typical notices do their job of informing consumers and helping them to make a decision or if better ways to communicate privacy information could be found.

The two researchers were Dr Alan Levy of the Food and Drug Adminsitration and Dr Manoj Hastak of American University's school of business.

They worked with Kleinmann Communication Group (KCG) to come up with three ways of displaying policies that sat alongside the typical notice in tests. These were a table notice, a prose notice and a 'sample clause' notice, which only provides the actual clauses used by companies to comply with the legislation.

The researchers questioned 1,000 people on their understanding of the notices. People were given sample notices and asked to make a choice based on the privacy notices alone and the quality of their decisions were assessed. The results showed that the best notice was the one produced by KCG and laid out in table form.

"The KCG Table Notice significantly outperformed other notice styles on measures of judgment quality as well as one measure of perceptual accuracy, the most difficult measure," said the research results. "The KCG Table notice shows a performance superiority for harder tasks that require complex comprehension, such as giving logically sufficient reasons for choice (Judgment Quality), or deciding how much information sharing is being done once opt-outs are exercised (AfterOptOut)."

The research discovered that the typical current notice performed least well on that measure of 'judgment quality'.

Levy and Hastak said that the reason that the table notice outperformed the other notice types was that it gave potential consumers more information and context.

"The key feature responsible for improved performance in the KCG Table Notice seems to be the table that listed the several possible kinds of information sharing that can take place and identifies the ones engaged in by the particular institution," said their study.

"By providing a fuller context for the disclosure of information sharing characteristics by a particular institution, the part-to-whole display approach seems to help consumers focus on information sharing as important and differentiating features of financial institutions," it said.

There were some benefits to other types of notice, they found. "The shorter Sample Clause Notice performs better on simpler tasks and actually performs better than the KCG Table Notice on the one task based on skimming the notice for the right answer," the research said.

But overall the table notice was the most effective, researchers concluded.

See: The research (64-page/362KB pdf)

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