Branding and marketing in the financial services sector
In this article, Samantha MARCUS (ESSEC Business School, Semester Exchange BBA, 2022) explains the changes and trends in branding and marketing in the financial services sector.
While generally overlooked, the messaging and branding of a financial institution is becoming increasingly more important, and financial institutions are facing pressure to act.
Financial service marketing uses various strategies and branding techniques to drive awareness and create brand loyalty. Unlike traditional tangible products, financial service providers must plant their brand in their consumers’ mind in any way they can because it is generally not a tangible product they are selling. The customer experience is extremely important in the financial services sector, and this is where branding and marketing play in. While the marketing approaches of financial products is oftentimes different than that of retail or consumer packaged goods, the marketing of financial services primarily utilizes two methods: traditional marketing and digital marketing
In the past, financial institutions have relied on marketing tactics such as word of mouth advertising, TV ads, radio and print marketing. As the consumer in the financial services sector is changing, these tactics are not as effective in this industry as they once were.
In 2022, financial service providers are being pushed to step up their digital marketing efforts. Whether it’s through optimizing your firm’s SEO, creating more personalized algorithms or being active on social media platforms, there are various efforts in digital marketing happening in the financial services industry. The financial services sector is leaning more into digital marketing and this strategy is beginning to show more returns in terms of reaching new consumers and driving brand loyalty.
Why are branding and marketing important in financial services?
Retail banks, investment banks, brokerages, credit card companies, and many more financial service institutions can benefit from branding and marketing. Now more than ever, the younger generations are not trusting financial service institutions with about 92% of millennials claiming they do not trust banks at all (Financeography.com, 2016). Branding and marketing in this sector are so important as they can build this trust with consumers. Traditionally, financial service providers did not have to focus as much on branding and marketing because their services were deemed a necessity and consumers would normally approach them. This is all changing now for a variety of reasons that make this outdated mindset ineffective and dangerous. One of the largest reasons that it’s important for financial service providers to utilize marketing is the commoditization of financial products; standardization has made it harder for providers to differentiate their products as there are now more options than ever before. In addition, disruptive financial technology (like blockchains/cryptos) is changing the financial services sector and decentralizing the control, therefore marketing and grasping consumer awareness is more vital than ever. Lastly, as our world becomes increasingly more digitized, consumers are expecting personalized, digitized experiences regardless of the industry.
Trends for financial services marketing
The Rise of Personalization
As the financial service industry becomes increasingly more saturated and decentralized, personalization within marketing strategies offers a way for firms to differentiate themselves and shift the focus to a customer centric approach. Traditionally, banking and financial services have been more focused on their products rather than their consumers, however this is all changing. As within any marketing approach, when financial service providers have a grasp on their audience and demographic, they are better able to appeal to the wants and needs of this consumer and it even begins to become part of their brand. This approach is becoming increasingly more popular, and it helps create more personalized relationships which facilitate customer loyalty which is crucial in the financial services industry.
As there is an emphasis on mobile technology and e-commerce now more than ever, firms are adjusting their marketing strategies to be more digitalized and more customer centric as mentioned above. Many consumers now prefer to manage their finances online, so it only makes sense that digitalization is a priority. Consumers want to manage their money, pay their bills, and buy the things that they need to on their own terms, so it is important that financial brands message this in their marketing strategies as well as process the right technology to cater to this need. Whether it is through marketing techniques such as pay-per-click advertising, email marketing, search engine optimization or activity on social media, financial institutions must push to develop their brand online in order to be noticed amongst competitors.
Intriguing social media content
In the financial service industry, creating impactful content is now being discussed. Video content can be utilized as a great marketing took and form of content as firms can utilize videos to create video courses or webinars to help their target audience understand their products and the more complex financial concepts. It is also a trend to utilize content by showing in your social media posts your firms services and your specialties.
Using personal stories to build a brand
Since the modern consumer has changed especially in the financial sector, product-focused, cold, and impersonal branding does not cut it anymore. Consumers are less trusting of financial service providers so financial brands must find a way to capture their consumer’s attention and create a brand that they trust. While traditionally financial services did not place much emphasis on the human element, there is increasing pressure for financial brands to let this side shine through in their marketing. Is there an interesting story within your company? Is there a personable employee to tell a compelling finance story or explain events in the industry? The question is now: how can a firm use marketing to create trust with their consumers?
Branding is the personality of a brand. Branding can include everything from your logo to your mission statement; branding is how you define your business. Branding goes beyond just the color of your website or the style of your font, but rather it is how you tell a story and how you draw the attention of your target audience. Branding is how you make a connection with your target customers.
While oftentimes people get branding and marketing get confused, there are fundamental differences between the two. Marketing is how a company positions their product based on their brand strategy. Marketing identifies a target market, uses the optimal tactics and segment markets to win over a bigger market share. Branding is all about knowing your company’s story while marketing is more focused on knowing who your target customers are.
Relevance to SimTrade Certificate
The SimTrade certificate allows students to increase their knowledge of financial markets, but it is also important to look at the business behind how financial institutions are able to thrive. Marketing and branding are a large part in this and how firms stay competitive.
Marketing in financial institutions’ sector is very interesting because it is a quickly evolving area and institutions are experiencing pressure to act in order to sustain their businesses and keep their customers. Financial service marketing is so different from what we know as traditional marketing and advertising as it is not a tangible product, but it is peoples’ financials and essentially their life; this adds a lot of importance on winning over consumers loyalty and trust. As the modern consumer has more options now than ever before, financial firms are placing more importance on marketing and shifting their strategies from a product-obsessed mindset to a customer-focused mindset. Financial firms and their marketing teams must look into getting the right marketing technology to support their consumer centric marketing initiatives. There is so much opportunity to build trustworthy brands and improve customer’s experience through carefully crafted messaging and the right technology. The correct marketing provides a unique opportunity for financial institutions to differentiate themselves in this evolving marketing.
Related posts on the SimTrade blog
▶ Cynthia LIN Financial products marketing in neobanks
▶Ashima MALIK Financial products marketing
Heding, T., Knudtzen, C. F., & Bjerre, M. (2009). Brand management: Research, theory and practice. Routledge.
Kapferer, J. N. (2012). The new strategic brand management: Advanced insights and strategic thinking. Kogan Page Publishers.
Financeography.com (November 30, 2016) 92% of Millennials Do Not Trust Financial Institutions with Money Matters
O8 Agency for Marketing Financial Services Marketing: Everything You Need to Know
Templafy blog Industry Branding Series: Branding Financial Services
About the author
The article was written in May 2022 by Samantha MARCUS (ESSEC Business School, Semester Exchange BBA, 2022).