Contents

Readability of Korean-Language advertising disclosures moderates knowledge effects

Lee, Taejun (David) / Huhmann, Bruce A. / Yun, TaiWoong

Abstract

Purpose Government policy mandates information disclosure in financial communications to protect consumer welfare. Unfortunately, low readability can hamper information disclosures' meaningful benefits to financial decision making. Thus, this experiment tests the product evaluation and decision satisfaction of Korean consumers with less or more subjective knowledge and with or without personal finance education. Design/methodology/approach A between-subjects experiment examined responses of a nationally representative sample of 400 Korean consumers toward a Korean-language credit card advertisement. Findings Financial knowledge improves financial product evaluation and decision satisfaction. More readable disclosures improved evaluation and satisfaction among less knowledgeable consumers. Less readable disclosures did not. Consumers without financial education exhibited lower evaluations and decision satisfaction regardless of readability. More knowledgeable consumers and those with financial education performed equally well regardless of disclosure readability. Practical implications Financial service providers seeking more accurate evaluations and better decision satisfaction among their customers should use easier-to-read disclosures when targeting consumers with less prior financial knowledge. Social implications One-size-fits-all financial communications are unlikely to achieve public policy or consumer well-being goals. Government-mandated information should be complemented by augmenting financial knowledge and providing personal finance training. Originality/value Although almost a quarter of the world's population lives in East Asia, this is the first examination of readability in disclosures written in East Asian characters rather than a Western alphabet. Previous readability research on Asian-originating financial disclosures has been conducted on English-language texts. This study extends knowledge of readability effects to growing East Asian markets.

Issue Date
2020-10
Publisher
EMERALD GROUP PUBLISHING LTD
Keywords Plus
CREDIT CARD MISUSE; FINANCIAL LITERACY; SUBJECTIVE KNOWLEDGE; INFORMATION; CONSUMERS; EDUCATION; IMPACT; STYLE; DETERMINANTS; PERFORMANCE
Keywords(Author)
South Korea; Financial education; Financial services; Readability; Advertising disclosures; Prior knowledge
DOI
10.1108/IJBM-03-2020-0090
Journal Title
INTERNATIONAL JOURNAL OF BANK MARKETING
Start Page
1421
End Page
1440
ISSN
0265-2323
Language
English
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