Introduction to communication

Last updated November 202610 sectionsabout 6 min read

Whatever else a credit officer does, assessing risk, granting facilities, collecting overdue accounts, none of it works without clear communication. This chapter fixes the basic vocabulary of communication that the rest of this paper builds on.

What communication is

Communication is the process of sharing information, ideas or feelings between two or more parties, such that the meaning intended by the sender is understood, as closely as possible, by the receiver.

Why communication matters

• Enables coordination of work between individuals, departments and organisations
• Supports informed decision-making by making relevant information available
• Builds and maintains relationships, with colleagues, customers and debtors alike
• Enables instructions, policy and feedback to flow through an organisation
• Underpins persuasion and negotiation, both central to a credit officer's work

Elements of communication

• Sender, the person originating the message
• Message, the information being conveyed
• Encoding, translating the message into words, symbols or gestures
• Channel, the medium through which the message travels (spoken, written, digital)
• Receiver, the person the message is intended for
• Decoding, the receiver interpreting the message
• Feedback, the receiver's response, confirming whether the message was understood
• Noise, anything that distorts or interferes with the message at any stage

The communication process

Principles of effective communication

Often summarised as the '7 Cs':

• Clarity, the message is easy to understand
• Conciseness, the message says only what is necessary
• Correctness, the message is accurate and free of errors
• Completeness, the message contains all the information the receiver needs
• Courtesy, the message is respectful and considerate in tone
• Consideration, the message is framed with the receiver's viewpoint in mind
• Concreteness, the message is specific and supported by facts rather than vague

An effective communication system

• A clear, appropriate channel for the message and audience
• Timeliness, so information reaches the receiver while it is still useful
• A reliable feedback mechanism, so the sender knows the message was understood
• Consistency between what is communicated through different channels
• Accessibility, reaching the intended audience without unnecessary barriers

Methods of communication

Internal and external communication

Barriers to communication

• Language differences or use of jargon the receiver does not understand
• Physical barriers, poor network connectivity, background noise, distance
• Psychological barriers, such as prejudice, stress, or a lack of trust between parties
• Organisational barriers, an overly long chain of command or unclear reporting lines
• Cultural differences in norms, gestures or expectations (see Cross-cultural communication, below)
• Poor listening or a lack of feedback, leaving the sender unsure whether the message landed

In credit work the barrier that does most damage is the one between what a collector says and what a customer in financial difficulty is able to hear. A customer who is anxious or ashamed hears threat where none was intended, and becomes harder to reach. Clear, calm and specific language, stating the amount, the date and the options available, removes more resistance than firmness does.

Cross-cultural communication

Cross-cultural communication is communication between people from different cultural backgrounds, where norms around directness, formality, personal space, and even what counts as polite disagreement can differ sharply. A credit officer dealing with customers, suppliers or partners across different communities and, in export credit (CCP Credit Management, in the chapter on export credit), across countries, needs to recognise these differences rather than assume their own cultural norms are universal.