All financial marketers know they operate in a highly regulated industry at every level. From a marketing perspective, they must adhere to strict regulations set by governmental bodies such as the Securities and Exchange Commission (SEC), the Federal Reserve, and various state regulatory agencies. These regulations govern how financial products are marketed, advertised, and sold to consumers. Sounds straightforward right? But just ask those in the industry how easy it is to achieve financial and bank marketing compliance 100 per cent of the time. They’ll tell you it’s a challenge, but in fact, that’s quite an understatement.
Along with the task of promoting mortgages, credit cards or investment opportunities in a category where there can be little product differentiation, regulatory compliance adds another degree of difficulty.
More often than not, it is an additional layer of complexity that slows down the process of getting brand and legally approved content out the door. And we all know when that happens, opportunities are missed. On the flip side, when content is rushed out the door without correct approvals, mistakes are bound to happen. As we’ll discuss later, these mistakes can financially cripple your company.
That’s why we have produced the 2024 Financial Services Marketing Compliance Guide. It’s free to download and will help you understand current and future threats and trends, as well as operational solutions for bank and financial marketing teams.
The Basic Challenges Around Financial Services Marketing Compliance
The complexity of marketing compliance in the financial services industry stems from the intricate web of regulations imposed by various governmental bodies and regulatory authorities outlined in our guide. They cover a wide range of areas such as consumer protection laws and advertising standards.
While current trends and threats can be found in our guide here are some of the fundamental factors surrounding financial and bank marketing compliance.
Different products and services have different marketing compliance rules
Most financial and banking institutions offer multifunctional products and services. While this provides customers with increased services and your company with greater opportunities, it also presents a challenge from a marketing compliance perspective as different products attract different rules. For example, a bundled product that combines a savings account with an insurance policy and investment advisory service may require compliance with three sets of regulations governing both deposit accounts and insurance products.
Marketing compliance codes depend on location
Financial marketing compliance rules differ depending on the market or jurisdiction you’re operating in. Rules can and do vary considerably from state to state. And, as we’re in an increasingly global market, those with cross-country offerings have it that much harder.
Audience counts when it comes to marketing compliance
Consideration of the target audience is paramount in financial marketing compliance. Regulations often impose specific requirements based on the characteristics of the audience, such as age or customer eligibility criteria. For instance, marketing to minors may necessitate additional safeguards to protect vulnerable consumers, while targeting accredited investors may require compliance with securities regulations governing investment solicitations.
Choice of media channel impacts financial marketing compliance
Selecting the right media channels for marketing initiatives is crucial for maintaining compliance in the financial services industry. Different regulatory requirements may apply depending on the medium and your message. For example, advertising through traditional channels such as television, radio, or print may be subject to specific content standards and disclosure requirements mandated by regulatory authorities. The same goes for, digital marketing channels such as websites, social media platforms, and email campaigns that are subject to their own set of compliance considerations.
Marketing compliance extends to third-party vendors
Financial institutions often rely on agencies and other marketing specialists for services and tools. Ensuring that these vendors comply with regulatory requirements and maintain data security standards is essential to mitigate compliance risks.
Marketing compliance must be proven regularly
Financial and bank marketing compliance includes document record keeping. Regular mandatory audits and conducted throughout the industry so keeping comprehensive records of marketing activities (including compliance breaches) must be made available.
Marketing compliance rules are never static
Finance marketing compliance regulations are continually being updated due to new media channels and marketing methods, new combinations of products and advanced tech services. Unfortunately, their evolution is also a result of some operators pushing the boundaries, manipulating or flagrantly ignoring regulatory code.
Why is Maintaining Marketing Compliance Becoming More Complex?
Why is the already complex medley of finance and bank marketing compliance rules becoming increasingly difficult to sustain? The short answer is that the rules constantly change and our content cycle demands creative assets, fast.
Why finance marketing compliance rules are fluid
Regulators are continually sharpening and tweaking the rules concerning financial marketing compliance. This is partly due to new media channels and marketing methods, new combinations of products and advanced tech services. Unfortunately, their evolution is also a result of some operators pushing the boundaries, manipulating or flagrantly ignoring regulatory code. Our guide contains more on this topic.
Changes to financial services ad spend
Our guide discusses the shift in media buying trends within the financial services industry and how this has impacted the content creation cycle. In a more content-hungry world where segmentation and being first to market are becoming increasingly critical, ensuring timely legal approval is obtained is complicated without leveraging technology solutions can help expedite the approval process
Failure to Uphold Financial Marketing Compliance Rules
Given the stakes for financial or bank marketing compliance misfires, regulators take an unsympathetic view when it comes to taking action. After all, when you’re dealing with dollars or shares, a small error can lead to severe and lasting financial consequences for individuals, trusts and companies. The ripple effect can be enormous. It’s for this reason that regulatory bodies have the monitoring of financial services marketing compliance at the top of their agendas.
There will always be shady operators who deliberately ignore or make questionable interpretations of financial marketing compliance rules. These companies and directors are typically faced with fines that run into the millions and lengthy suspensions. Yet, it’s also frighteningly easy for finance or bank marketers to make an honest mistake.
When a Rubik’s Cube of compliance regulation is coupled with the blindly fast pace of today’s content cycle, it’s only a matter of time before things fall through the cracks unless you have a coordinated centralized system of record. Whether there has been a simple oversight or technical glitch, it can cost your company several years’ worth of marketing budget. The ensuing reputational damage permanently scars your brand or career if the failure is high profile.
How to Control Financial Marketing Compliance
Our guide outlines more than current trends and horror stories of crippling penalties for stepping outside of marketing compliance. It provides practical solutions to help finance marketers stay compliant and meet marketing objectives.
As the monitoring and enforcement of financial marketing compliance become increasingly sophisticated, the solutions to staying on top of them need to be equally sophisticated. Due to a convergence of need and technological capability, advanced workflow tools are available to empower financial services marketing leaders to not only maintain compliance but exponentially improve marketing efficiencies.
Marketing operations software plays a large part in modern organizations’ ability to cope with the pace and volume of creative content, as well as the fluidity of finance and banking’s compliance goalposts. In fact, it was built to make marketing compliance easier to achieve and maintain.
Marketing operations platforms perform many functions, at a base level they work by providing an end-to-end system for content creation, then centralizing brand-approved creative assets and making them easy to find and share. They use advanced AI and automation to populate complex legal requirements across an unlimited amount of scenarios and integrate them into editable creative templates.
Importantly for finance marketers, these platforms provide detailed audit trails and robust reporting capabilities that show transparency and accountability. This enables marketers to show adherence to regulatory requirements to internal stakeholders and regulatory authorities alike. Additionally, they track and schedule compliance checks for at-risk content.
Harnessing cutting-edge marketing operations software not only increases efficiency by removing many manual tasks, but also empowers financial marketers to streamline compliance processes, mitigate risks, and focus on more strategic, higher-value work.
The silver lining among the stringent regulation is that financial marketers have had to find smarter ways to operate that ultimately benefit the ROI of their organization.
Don’t Invite Financial Penalties and Bad Press
At the core of financial services marketing compliance is a commitment to consumer protection and industry integrity. It’s therefore a large part of the job for those charged with safeguarding financial marketing compliance to stay on top of emerging trends and tools.
Avoid fines and reputational damage by keeping up with industry trends, undertaking regular training, engaging with regulatory bodies, collaborating with legal experts and adopting compliance software so you can maintain marketing regulation with confidence. You’ll cultivate trust, fortify your brand, and emerge as an industry trailblazer.
Download our guide and empower your team to achieve and maintain regulatory compliance while delivering impactful, brand-aligned content that resonates with your audience and drives sustainable growth.
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