Extract from Sarena Regazzoni’s article “Why Marketing Compliance for Financial Services Is A Big Deal”
In today’s fiercely competitive business landscape, financial services companies, like their counterparts in other industries, rely on advertising and digital marketing strategies to create brand recognition, promote their products and services to potential customers, and engage with their existing client base. According to a comprehensive market analysis conducted by Statista, digital advertising expenditures in the financial services sector in the United States surged to a staggering $21 billion in 2020. This impressive figure is expected to experience further growth, reaching an estimated $30.75 billion by the end of 2023.
Why do financial services firms use digital marketing?
Financial services companies heavily invest in digital advertising because it equips them with powerful tools to precisely target specific audiences in a cost-effective manner, while simultaneously expanding their reach across different geographical locations. Moreover, digital advertising enables these firms to maintain a consistent online presence, enhancing brand visibility, trust, and credibility. Additionally, digital marketing provides a valuable platform for sharing educational content that simplifies complex financial topics, positioning the company as a reliable source of information.
What are some risks associated with financial services marketing?
The financial services industry is subject to strict regulations to ensure fairness, protect consumers, and maintain financial stability. Organizations must comply with various regulations from bodies including the Consumer Financial Protection Bureau (CFPB), the U.S. Securities and Exchange Commission (SEC), and the Financial Industry Regulatory Authority (FINRA) among others, related to consumer protection, suitability, and investment. Failure to comply with regulations can have serious consequences, including regulatory penalties and damage to a company’s reputation.
