Consumer trust plays a fundamental role in the financial services industry.
The inherently personal nature of the products and services provided, coupled with their potential magnitude of impact, puts trust right at the center of the consumer relationship. As such, it’s not enough for financial services brands to simply talk the talk when it comes to trust—they must actively diagnose and acknowledge weak spots and constantly improve their operational mechanisms to build better trust-related outcomes.
Indeed, this is an area where many players in the financial ecosystem are struggling to meet expectations, and the struggles are even more prominent in digital channels—where there is typically less human interaction, greater anonymity, and greater fraud risk. It’s a shortcoming that’s also been further exposed post-pandemic, as consumers have increasingly embraced online channels, rendering the physical presence of a retail footprint less meaningful. To top it all off, emerging fintech apps and other non-traditional financial products and services are now flooding the marketplace, offering greater levels of convenience, choice, and flexibility.
Against this backdrop, the financial institutions (FIs) that build acceptance and trust through agile digital marketing touchpoints can better position themselves to develop stronger consumer relationships—and grow their bottom lines. Here, we discuss some key aspects of digital trust in financial services marketing and provide recommendations for how financial advertisers can strengthen that trust moving forward.
In the wake of privacy-minded regulations such as CCPA and GDPR, and with Google now (supposedly) deprecating third-party cookies in Chrome in 2024, first-party data looks increasingly central to supporting a vibrant digital media advertising strategy.
For financial institutions (FIs) with extensive product sets and revenue streams, collecting consented data and leveraging it for marketing is particularly important. It is integral to prospecting efforts, and it has the potential to unlock a wave of cross- and up-selling avenues, especially when it is merged with second- and third-party audience data sets to create a holistic view—not just of an existing customer, but also the types of customers an FI wants to acquire within a particular product type. This level of data activation can inform an extremely measurable approach to media buying.
The caveat here, however, is the handling of this data. When it comes to anonymizing and cleaning these data sets, FIs must be nothing short of immaculate. A massive 75% of consumers are not comfortable making a purchase from a brand that has poor personal data ethics. With the stakes so high—and awareness of these issues continually growing—the way FIs collect, store, curate, and activate consumer data, and handle privacy, can become a point of differentiation. Companies must be vigilant, communicate transparently, and lean on experts to support this evolution and create future-proof data infrastructure.
How financial institutions leverage targeting mechanisms for a digital marketing campaign is only one piece of the advertising puzzle, but it’s one that deserves some dedicated attention and consideration. Oftentimes, FIs can be overly focused on the review and internal alignment of messaging and creative communications, all of which must go through a rigorous legal compliance review before they’re pushed out the door (and for good reason!). But now, with consumer targeting under the federal microscope, brands will need to be just as focused on the specific ways they reach their consumers—and this, in turn, may require changes to some well-established processes.
One example of this intensifying regulatory scrutiny is the Consumer Financial Protection Bureau’s (CFPB) latest interpretive rule concerning behavioral targeting through digital media (ruling in full here). In short, it says digital marketers acting as service providers “can be held liable by the CFPB or other law enforcers for committing unfair, deceptive, or abusive acts or practices as well as other consumer financial protection violations.” With this in mind, FIs must now look much closer at service provider compliance (for example, with agencies) and the platforms and systems they use to distribute messaging.
Consumers expect FIs to employ high ethical standards with both their communications and their targeting methods. For a long time, everyone simply placed trust in their agencies, the big channels, and the big technologies to do the targeting part of that mix for them. This approach, however, is no longer acceptable. The CFPB ruling may be somewhat cloudy, but it is shining a spotlight on the need for a more tightly intertwined media buying process in the financial industry so that advertising is executed in a way that builds trust with target consumers. This is pivotal for all FIs, but especially important for regional and smaller institutions, as trust in their local communities is core to their success.
The consumer is king/queen in the digital world, and perhaps nowhere does this ring truer than in the financial space, where experiences and brand perception are increasingly assuming greater significance. This means financial advertisers must approach growth differently—in a way that re-engineers how they plan, optimize, and report.
Having a full range of features and products is table stakes for FIs, but today, many of those individual offerings now sit disconnected in silos. This presents a massive headache for marketing organizations in a space where experiences are no longer a differentiator when it comes to trust, but a crucial aspect of maintaining it. FIs, especially the old incumbents, need to focus on breaking down those silos to determine what is right for the consumer and repairing their reputations at a brand level—rather than, say, revolving their strategies around marketing the next new innovative product.
This is rooted in embracing the power of brand loyalty and brand reputation, establishing a presence in the marketplace and acquiring consumers before they even reach their purchase point. It’s no easy feat to achieve, though—not when there are emerging tools and apps that have a leg up in this conversation because they’re not immediately stymied by the stigma that is “big banks,”. Or when technology juggernauts like Google and Apple are entering the financial realm with reams of consumer data, best-in-class user experiences, and already-comprehensive operating mechanisms.
This competitive landscape requires traditional FIs to evolve, as the long-term operational and product expertise that at one point was an advantage has been eclipsed by neo-fintech. Younger generations, in particular, are increasingly distrustful and wary of the traditional institutions for fear of being exploited through hidden fees and other deceitful tactics (something else the CFPB is tackling, by the way!) The digital revolution has put FIs on a collision course with a range of newer, nimbler rivals, and to stand a chance, they will need to reframe their strategy to prioritize branding over product and more effectively meet the omnichannel experiences consumers now expect.
Inspiring consumer trust through digital channels will need to be an ongoing priority for financial institutions, and it will certainly impact how they operate, interact, and deliver consumer outcomes. It’s not something they can achieve via one-off campaigns, but instead through the effective installation and utilization of robust data infrastructure, ethical targeting and digital marketing compliance in a stormy regulatory environment, and a sharp focus on brand perception over pursuing shiny new products.
Looking for more financial advertising tips and tricks? Check out Basis Technologies’ dedicated financial services resource center.