Overcoming Communication Barriers: A Guide for Finance Professionals

Why Effective Communication is Critical in Finance

“What we’ve got here is failure to communicate.”

That famous line, delivered by a character in the 1967 film Cool Hand Luke, sums up the communication breakdowns that occur in workplaces every day. The consequences often result in delayed decisions, unnecessary rework, and even damaged professional relationships. 

In finance, where precision matters and decisions often involve significant resources, these communication failures can be particularly costly. The good news is that most of these breakdowns come from a handful of common barriers. Once you recognize them, you can take simple steps to ensure your message is received clearly and accurately.

Five Common Communication Barriers in Finance

1. Technical Jargon

Every profession has its own language and specialized terminology called jargon. Finance is notorious for its jargon. While this jargon might make perfect sense to insiders, it can mystify others who don’t have a finance background.

For example, an analyst might write:

 “The EBITDA multiple suggests a potential undervaluation relative to comparable companies.” 

A plain language alternative might be:

“This company appears to be undervalued compared to similar businesses based on its earnings.”

Which version of the sentence is easier to understand? For most stakeholders, such as non-finance executives, the second sentence with plain language is a better choice.

When financial experts communicate with non-specialists, these terminology differences often create gaps in understanding key takeaways and implications. This can delay decisions or lead to errors.

2. Information Overload

Too much information at once can overwhelm the receiver and bury the key message. Have you ever sat through a 50-slide PowerPoint presentation with slides loaded with data, but the main takeaway wasn’t clear?

Data is abundant in finance, making this barrier particularly common. Financial reports and presentations that contain too much detail can obscure the most important points, making it difficult for the receivers to identify what matters most.

3. Different Communication Styles

Some of your stakeholders prefer short, high-level overviews, while others need detailed explanations. A CEO may expect a concise one-page summary, while a colleague in operations might need a detailed breakdown to do their job effectively.

This mismatch in expectations often leads to frustration on both sides. When someone expecting a brief overview receives an in-depth analysis (or vice versa), the communication fails to serve its purpose despite the sender’s best intentions.

4. Cultural and Personality Differences

Different backgrounds and personalities shape how people communicate. Some cultures value directness, while others prioritize politeness and indirect communication. Some people process information verbally while others prefer to reflect before responding.

In global corporations and financial institutions, these differences can significantly influence how communication is received. What seems direct to one person may feel abrupt or rude to another, creating tension that interferes with the message itself.

Example: A finance manager emails a team member: “Your forecast is incorrect. The numbers don’t align with our historical data. Fix it and send it back by the end of today.”

Here’s how individuals with differing communication styles might receive that message:

• A person with a direct communication style appreciates the clarity and efficiency of the message. They see it as helpful, straightforward feedback that allows them to quickly identify and fix the issue.
• A person with a more formal, indirect communication style may perceive the message as harsh or a reproach. They might respond better to messages delivered diplomatically, perhaps beginning with something positive or using more polite language.

5. Remote and Digital Communication Challenges

In today’s digital workplace, it’s easy for tone and intent to get lost in emails and group chat platforms like Slack and Microsoft Teams. A simple response like “noted” in a chat can come across as dismissive if misinterpreted.

When sharing financial information or recommendations digitally, nuances are often lost without vocal tone and body language to provide context. Financial discussions that would be clear in person can become confused, protracted email chains with increasing frustration on all sides.

Three Ways to Overcome Communication Barriers

1. Keep It Simple

Whether you’re explaining a complex financial concept, writing an email about quarterly results, or leading a budget presentation, focus on clarity. Ask yourself, “Is this message as simple as it can be while still being effective?”

Avoid making assumptions about what your audience already knows. What seems obvious to a financial expert might not be clear to others, even within your organization. Break down complex financial concepts into digestible pieces, using analogies where helpful.

2. Use the Right Format

If your message requires a lot of explanation, consider whether an email is the best option. Some topics, like explaining variance analysis or reviewing financial models, are better discussed in meetings, quick calls, or using shared documents where people can provide input.

Match your communication channel to the complexity of your financial message. Simple updates can be emails; complex analyses might necessitate a meeting.

3. Confirm Understanding

Encourage feedback by checking in with your audience. A simple “Does this make sense?” or “Let me know if you need more details on these projections” can prevent costly misunderstandings.

In face-to-face discussions, watch for non-verbal cues like furrowed brows or confused expressions that might indicate confusion, even when someone doesn’t speak up. This is especially important when discussing financial information, where people might hesitate to admit they don’t understand something.

The Positive Impact of Strong Communication Skills

By recognizing these common communication barriers and implementing these strategies, finance professionals can significantly improve how effectively they share information, make recommendations, and influence decisions. When you communicate clearly, your analyses are more likely to drive decisions, your recommendations are more likely to be implemented, and your expertise is more likely to be recognized.

Build Your Communication Skills and Accelerate Your Career Growth

Take your communication skills to the next level with specialized training designed specifically for finance professionals. CFI’s Essential Communication Skills for Finance Professionals equips you to communicate with clarity and confidence, structure presentations effectively, and make a bigger impact in your organization.

Start Learning Now!

Additional Resources

Prioritizing Internal Stakeholders

Communication: A Vital Life Skill

Mastering Data Storytelling

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