Information needs and efficiency in banking services. A 'demand-side' approach

The financial system has always been subject to complex public scrutiny for a number of reasons, aimed at ensuring, for example, the efficient mobilization of savings, the effective management of banking crises and their possible domino effects, while enhancing competition and safeguarding consumers, in the general interest. Ensuring transparency in commercial transactions is part and parcel of this process of scrutiny and is one of the primary obligations of banks, and lenders in general, which are required to inform their customers clearly and transparently, with respect to the characteristics, terms and conditions of their products and services. The changes taking place in the financial system are encouraging the reform of the transparency regulations. Among the most incisive transformations is the spread of complex financial instruments and the broadening of the range of available alternatives. The reform projects that have secured the greatest consensus to date call for the introduction of firmer requirements for the full disclosure, in intelligible terms, of the characteristics and conditions of the services offered, with respect to the amount and structure of the data that should be made available to consumers to enable them to make informed decisions, without leaving them with the impression that they need further information. The aim of this paper is to provide a clear picture of the amount and characteristics of the information that should be made available to consumers when taking out a loan or mortgage. To achieve this aim certain issues must first be addressed, such as investigating the characteristics of the loan process and organizing the information collection activities.