Increasing regulations, consumer trust issues and a complex subject matter. Marketers within the forex, banking and hedge fund sector know the challenges only too well. Here’s what makes financial services content marketing so hard and how you can navigate its prickly landscape.
#1 Financial services can be hard to understand
Financial services can be hard to understand. And therefore, marketing has to be tailored in a way that’s accessible not only to avid traders and financial experts, but novices and newbies too. Here are the main challenges.
Low Financial Literacy
Working in the industry and knowing all the jargon is one thing – but are your consumers on the same page? Perhaps not. According to the Financial Industry Regulatory Authority (FINRA), nearly two-thirds of Americans exhibit low financial literacy. Millennials make up 76% of this proportion and as they’re the group set to provide significant financial services growth in the coming 10-20 years, this ‘lack of knowledge’ issue must be address through strategic and clever marketing.
Financial services jargon can be a real roadblock to the progress of your brand. So, when you’re planning and preparing content, remember the following:
- The majority of American adults read at seventh and eighth grade levels and therefore language should be clear and concise. Short sentences and punchy paragraphs are also ideal.
- According to a recent Empower Retirement survey, 69% of respondents were unclear on the meaning of the term ‘asset allocation’. Millennials made up 63% of the respondents who were unclear on the term ‘plan participant’. So, consider the reader and your chosen demographic in all content creation.
It’s crucial not to over complicate when introducing new services or products to consumers you know to be new to the industry. Yet at the same time, dumbing down content is not recommended either if your audience is financially literate. Audience research and marketing segmentation is the best way to overcome this issue.
An Information Overload
Unfortunately, the internet is saturated with financial information.30% of the world’s population make online transactions and 69% have an account with a financial institution. Click To Tweet
With so much rhetoric, it can be easy for brands to get lost in a financial sea of currencies, trading pairs and analytics tools. Financial services marketers therefore have the tough job of educating consumers on the real workings of financial services. They need to provide the details that will excite and entertain the consumer. That will increase intention. That will keep people coming back for more. And that will confirm a strong brand identity.
#2 Customer loyalty is fickle
The finance sector is highly competitive. According to the Financial Industry Regulatory Authority (FINRA), there are more than 3600 brokerages in the US. Many offer largely similar products such as trial accounts and trading platforms. And this fuels fickle customer behaviour. Indeed, nearly 8 in 10 millennials are willing to switch banks for a better service.Over 50% of millennials don’t see any difference between their current bank and the competition and so 1 in 3 of them are willing to switch banks in 90 days. Click To Tweet
With this in mind, marketers must craft campaigns that build loyalty, conform to ethical expectations and adapt to their audience. Letting content stagnate or become irrelevant is a no-no and services must always be as advanced as possible – accompanied by top explainer content, how-to articles and social media marketing efforts.
All things considered it’s easy to see that gaining trust is hard. But merging this with ever-changing demands and expectations is even harder.
#3 Poor digital experiences
Consumers are becoming more digital-centric. A report by leading consumer intelligence company Resonate revealed that close to 5.6 million Americans are considering switching their banks. These people are 16% more likely to value digital innovation when choosing financial services products than those sticking to their service providers.
Most financial brands are aware of the power of going mobile with their service, but they are slow in embracing complete digital experiences. 57% of banks across North America, Europe and Australia have digital capabilities but they are yet to match their consumers’ digital fluency and their need for digital innovation.
Digital experiences and compliance
Most financial service marketers are adapting to the digital revolution slowly because they have to find safe and acceptable ways of navigating the precarious world of data privacy. GDPR rules now require that data is not held beyond a specific purpose and time. The regulation also requires consumer consent and proof of such consent.
Financial services marketing normally involves revisiting and analysing information from past campaigns using large volumes of sensitive customer information. However, keeping any information for longer than required is non-compliant. Using the data for a marketing campaign other than the one originally intended is also non-compliant.Non-compliance attracts fines of up to €20 million or 4% of annual revenue. Click To Tweet
Any wrong move with your financial services marketing and you may end up out of business.
#4 Complex strategy setting
Effective financial services content marketing cannot exist without a robust marketing strategy. Many marketers know the need for a good strategy but several factors complicate the strategy-setting process.
Dealing with different consumer needs
Millennials are taking over as the largest generation, but financial service brands cannot ignore the rest of their consumer base. The younger generation wants personalised digital experiences, sharing economies, convenience, and minimised risk but other generations have their own preferences.
26.5% of baby boomers still prefer visiting their local bank to complete transactions and most of their information needs are connected to retirement. Gen Xers have the most debt with close to 25% of them thinking they will never be able to repay it. This generation prefers mobile banking (48% have mobile banking apps) and it wants information on getting rid of debt.
Tolerance for promotional gimmicks is low across all demographics but information needs are dissimilar. Marketers must deal with a variety of expectations and master the use of multi-channel solutions. Consumers need worthwhile information that creates positive experiences but there are also complications in the planning process.
Navigating through consumer mistrust
Many people assume that the distrust of financial institutions stemmed from the financial collapse of 2008. However, the lack of trust can be traced back to the origins of modern banking in the 17th century. Back then people viewed banks as corrupting and peculiar due to the idea of pooling money and giving it to other people with interest charges.
Regardless of the origins, consumers’ mistrust of financial services means there is an inherent hostile disposition towards many financial services.Only 23% of millennials will invest in the stock market while the rest would rather keep their money. Click To Tweet
This is because older millennials are still reeling from the 2008 financial crisis. One in four millennials also believes that winning the lottery is a better retirement investment plan compared to investing in the stock market.
The mistrust makes any advertising aspect of financial services content marketing difficult.
Taking stock of external influences
Numerous external factors affect the world of financial services. Marketers have to keep up with all the trends and the effect of current events on financial services.
Whether it’s a market moving tweet from Trump or a world event that shifts currency prices, staying on top of updates is a must. Double-checking sources is also crucial. If you’re tweeting the latest news in a bid to be a go-to source of information, for instance, the smallest mistake can be bad for reputation. So, as well as being current, you must be correct.
#5 Keeping things alive
For many, the finance sector is far from interesting. But does that mean financial marketers should sit back, relax and churn out content that’s dull? Absolutely not. Amid a stiff regulatory climate, brands must stand out from the crowd and keep the industry alive with fresh, new ideas. Companies like CreditKarma and Mint, for example are nailing snappy, sharp, interesting and educational content across their blogs and social sites.
Topics such as teaching kids about money, finding the right summer drinking budget and money-saving ‘vacay’ tips show you don’t have to be rigid in your approach.
To overcome the concept that finance is boring, you can also use visual content. Tweets with an image get 150% more retweets than those without. Facebook posts with an image get 2.3x more engagement than those without an image. Including video content in marketing emails boosts click-through rates by up to 300%. And with 91% of consumers preferring visual content over written text, there’s every reason to make your marketing pop.
#6 The battle between compliance and creativity
It’s not a secret that regulations dominate the finance sector. For example, GDPR rules restrict how long information can be held for. Personal details cannot be held for future campaigns if they have already served their purpose.
What’s more, ESMA rules now prohibit promotions that offer excessive bonuses and incentives to encourage investing in forex or CFDs. And with MiFID II enforcing content that is not misleading, marketers must be very careful with their wording. MiFID II also confirms that risk warnings should be in a font size that’s at least equal to the predominant font size. So, there’s no hiding information.
Compliance is necessary, but that shouldn’t mean creativity should dip out. Building a personal relationship with consumers is a great place to start. And the ideal way to set yourselves apart as a financial brand that cares. Ally Bank did this last year with their Banksgiving campaign which granted individual consumers cash prizes.
The Navy Federal Credit Union’s #MondayMotivation posts are a great example of creating a sense of community. Also, Morgan Stanley’s Idea Podcast helps to establish them as thought leaders within an increasingly competitive space.
Bringing it all together
Financial services ranks as one of the most difficult products to market but competition is hotting up. Today’s fintech banks are leading the way with jaw dropping tech, engaging social media and exciting content marketing. Be compliant but be creative and align your financial services marketing with the needs of 2019. Not sure where to start? Our team has created blogs, PR, videos, social media campaigns and much more for the top financial services brands. Talk to us now.