Key marketing challenges for financial services brands

Key marketing challenges for financial services brands

The difficulty with marketing for financial services brands has always been a matter of trust. As much as they need them, consumers have an almost innate distrust of banks, building societies, lenders, and financial advisors. The 2009 financial crisis exaggerated that. But even 15 years on, there is scepticism when financial services are mentioned, meaning that the effort behind any marketing endeavour has to be doubled to elicit any positive impact. And in 2024, 76% of people still say that they’d be more likely to trust financial advice from friends and family than from professional services- and that’s not the only marketing challenge facing this hypercompetitive industry. So, why is marketing so problematic for financial institutions, and what can businesses do to overcome the challenges they face?

Why is marketing so difficult for financial organisations?

Marketing has become more challenging over the last few years. Financial organisations have had to face not only the lack of public trust but also a reduction of funds—both within the business and amongst potential customers—driven first by the recession and then the ongoing cost-of-living crisis. There are also regulatory compliance issues and the changing marketing arena to deal with.

While businesses are scrabbling to engage customers, enhance brand differentiation, meet regulatory standards, and manage their budgetary restrictions, the established marketing techniques have been failing. Pay per click (PPC), banner campaigns, and social media ads are no longer generating the returns they once were. The public has become more discerning and more aware of algorithmic targeting and paid content, so businesses of all varieties have had to work harder to be seen and engaged with.

Which marketing approaches are working best for financial industries in 2024?

Trust has always been the sticking point for the financial services industry. Where trust is low, lead generation is always going to flounder, limiting the number of worthwhile marketing approaches. But there are a few that do better than others, whether used independently or collectively.

• Targeted offers – Whether looking at discounts, giveaways, webinars, or loyalty programmes, targeted offers usually attract attention. A good offer can actively engage an audience and gain media coverage as an added bonus. But they must be chosen well, particularly when used by financial services companies, where consumers are more interested in trustworthiness and reliability than gimmicks and limited time offers.
• Referrals – While targeted offers may not be 100% effective in the financial services sector, they can have better results when used in conjunction with referrals. Where trust is difficult to secure, it only makes sense to build upon the faith you do have, and statistics show that 76% of consumers are willing to refer a friend if they have had a good experience with a business. This willingness can be amplified if existing customers are incentivised to make referrals with special offers. And with 92% of consumers trusting recommendations made by friends and family above all other forms of advertising, ignoring the power of referrals is a significant oversight, especially as technology now means that implementing a referral programme is much easier than ever.
• Personalisation – With the dawn of artificial intelligence (AI), personalisation is becoming an increasingly popular advertising tool, particularly in retail. But in finance, where people don’t want to feel as if they are being ‘cyber-stalked’ by businesses, personalisation is proving more effective when used to tailor communication and marketing to existing customers instead of attracting new leads.
• Content marketing – Content remains an important element of any brand’s marketing strategy. It’s integral to brand building, differentiation, and customer relationships. It’s also vital in acquiring organic traffic – perhaps even more so since the 2024 Google Core upgrade. However, content marketing continues to present problems for lead generation, including the ability to be found in a highly competitive landscape where every business uses the same set of keywords. Blogs, editorials, and social media help, but they can’t be relied upon to build presence, authority, and trust.

In the financial services sector, businesses must balance accessibility and trustworthiness. Brands need to be seen and spoken of, but they also need to be serious and respected. Finding a way to satisfy both needs is difficult. Leveraging your customers’ trust in you and your performance is one way to do that in a competitive and sometimes hostile landscape.

Kirsty Sharman is a referral marketing expert and founder of Referral Factory, which provides easy-to-use, plug-and-play referral software to help businesses of all kinds build, launch, and manage referral programs.