The advent of digital marketing transformed the marketing industry – the low barriers to entry in terms of cost and required skill to start, the ways of targeting that were not available elsewhere, and the immediate feedback on performance was a revelation. However, regulatory legislation is very much still present in the financial space.
After years of working with financial services brands, we’re au fait with both worlds. So, let us help you navigate this tightrope. Read on to discover more.
Are you in-the-know when it comes to digital marketing rules and regulations?
Like any great technology, digital marketing hasn’t always been wielded in the best interest of the end user. As a result, ultimately, advertising laws and regulations were brought in, or digital was affected by wider regulation – GDPR, PECR (and cookie rules), and of course the Data Protection Act.
Some platforms, particularly the big ones like Meta (Facebook) and Google, built in some features into their platforms to try to mitigate regulation transgression, but there’s a considerable burden on the advertiser still.
Furthermore, beyond the 100 plus pieces of regulation addressing advertising, one must consider the CAP code, and the ASA.
Who regulates advertising in the UK?
At the same time, we have the heavily regulated financial services (FS) sector.
Any marketer working in financial services should be aware of FS advertising laws and regulation, that is used to protect the consumer and maintain market stability.
Financial promotions (“fin prom”) regulation in particular should be drummed into any insurance, building society, bank or fintech marketer. Given this covers any advertising that promotes a financial services product (a policy, a savings account, a mortgage and so on), there are few adverts produced by financial service marketers that don’t need to comply.
As with the marketing industry, there’s a host of regulators, and therefore acronyms, to consider – Financial Conduct Authority (FCA), Financial Services and Markets Act 2000 (FSMA), and vertical specific ones e.g. promotions for investment products may also need to comply with the Markets in Financial Instruments Directive (MiFID II), while promotions for consumer credit products are regulated by the Consumer Credit Act 1974.
It’s important to remember that FCA rules don’t just cover what is said in the promotional content, but also the target audience, and the medium used to deliver the promotion.
Both of which are highly pertinent factors in the advances in performance marketing. With the introduction of Consumer duty rules, decisions in these areas need to be more deliberate and rationalised than ever.
With these two heavy bodies of regulation, there’s a lot to consider for any performance marketer in the UK, including what happens when these interact with the ever-evolving capabilities of digital marketing.
This article hopes to highlight the potential risks of regulatory breach and financial penalties when legislation and technology collide, but also explore means to mitigate those risks.
A true financial services digital marketer knows how to utilise these technical advantages without jeopardising a positive customer outcome.
Here’s a quick overview of Google search features
As with marketing rules and regulations, we could fill a book on all the digital marketing features available. However, here are those we believe are the biggest opportunities in digital marketing, but also the likelihood of greater risk.
Search engine optimisation can be the magical oil that makes your marketing engine run smoothly – when it works in your favour it can provide high quality inexpensive traffic (not free, you don’t get to high organic positions through hopes and dreams after all) – this brings down the overall cost per acquisition, allowing other growth channels to run almost at break even and still provide traffic.
From featured and rich snippets to ‘people also ask’, Local maps and sitelinks, SEO can put your content in front of your target audience efficiently and effectively.
Yet, in many ways, SEO is the least in your control of all digital marketing channels. Beyond no indexing content, or not creating it in the first place, you cannot say unequivocally what search that your site will appear for, where, or when.
Even deleting content isn’t an immediate remedy (you can hasten that with Google’s outdated content tool though). This presents obvious risk with outdated or inaccurate content – if a customer acts off the back of the content, even if it was no longer meant to be live, or meant to appear for the search result it does, a financial services institution could see themselves in hot water.
Also, this is the content you didn’t want to appear – the content that is up there, intentionally, is of course the main risk. Unintentionally misleading claims, inaccurate content, or buried important details in fin proms all jeopardise the consumer and expose the brand. Having them rank organically, hence exposing them to exponentially more consumers, exacerbates the potential damage.
SEO run without an understanding of the nuance of financial services regulation is a ticking time bomb with a silent tick.
Google Ads (Paid Search)
If you’re reading this, you probably don’t need telling how powerful paid search, and specifically Google Ads, can be.
The Google Ads platform continues to evolve its advertising options to enhance both targeting to avoid waste, and dynamic ad creation to increase response. Let’s take a look at three of the big ones.
Dynamic Search Ads
Dynamic Search Ads (DSAs), for many verticals, are great – they work by pulling content from a predetermined set of URLs on your site, and when Google deems that a search matches this content, it’ll generate an advert.
Sounds great right? For retail maybe. Actual campaign performance permitting of course.
There’s a reason the classic examples were often “red shoes” and “blue jeans”. The worst consequence of a pair of high heels showing for hiking boots is a wasted click (or perhaps a rather uncomfortable climb). The consequences of a search ad that suggests a product provides a financial benefit or protection that it doesn’t are significantly more severe, both for the customer and the advertiser.
Responsive Search Ads
Responsive Search Ads (RSAs) can be incredibly powerful – you create a few versions of the ad to be mix and matched by Google to get the optimum combination. This is pretty smart; the number of combinations that can be tested automatically far exceed what is feasible in the day of your average PPC manager and a copy of Excel.
Just as with any vertical, the whole thing needs to hang together whatever combination – it’s been calculated that 32,760 ads are possible when you have 15 headlines, 4 descriptions, and Google Ads proceeds to mix and match up to 3 headlines with 2 descriptions… You can have 2,730 different combinations of the headlines alone!
The number is mind-boggling. Google actively advises not “pinning” any headlines because it significantly reduces variants (by over 75% according to some sources). There’s an argument to be made on whether statistical significance can really be reached within our lifetimes, but that’s a whole other topic; there’s a greater issue here if you’re in financial services.
If your compliance processes require that every ad gets sign-off, your compliance team will need to prepare for 273 hours of checking for a single ad (assuming each ad takes only 30 seconds to approve).
Obviously, that isn’t going to happen.
If you’re fortunate enough to have a more progressive compliance team who “dip checks”, they can only feasibly see a handful of thousands of ads and these ads may include inaccurate or misleading claims, or fail to comply with regulatory guidelines.
It takes a lot of care to ensure that an RSA’s components are structured so that they remain compliant in whatever combination.
What about targeting options for financial industries?
Finally on paid search, we discuss targeting.
Alongside the immediate feedback loop and the low barriers to entry, the targeting on digital channels is one of its greatest advantages (no-one enjoys paying £30k for a “target list” of addresses to do a direct mail drop to, even when it did work).
Google’s targeting options can be loosely grouped into four themes:
Those based on your data (from retargeting data to customer match).
Those based on Google’s data.
Customer match, in particular, is extremely effective but justifiably scary for the data protection regulators.
This is not a uniquely financial services challenge. Data Protection applies to all. However, when combined with a heavily regulated sector like financial services, with considerations like ICOBS 5.2 demands and needs, it’s understandable that so many institutions simply avoid this brilliant targeting option due to the lack of multidisciplinary expertise to navigate it in the interest of the consumer.
A quite reasonable debate is, if you feel a group of customers is vulnerable and therefore should be excluded from adverts, is it reasonable to upload their details (encrypted of course) to an advertising platform to ensure they aren’t exposed to it, or is that in itself a breach of duty?
Clearly the powerful but problematic use of first party data in custom match is one to be handled with extreme care and expertise, but what of the other options?
Google’s own data offers a wide range of targeting options for advertisers, including geographic targeting, device targeting, and audience targeting.
While these options can be useful for reaching specific groups of consumers, they can also be risky if not managed carefully. For example, targeting options may inadvertently exclude certain groups of consumers, or fail to comply with regulatory guidelines.
Something as innocuous as a negative keyword for a common misspelling could mean that an ad is not presented to someone who doesn’t have English as their first language, or with dyslexia, unintentionally excluding products from vulnerable groups.
More On Regulated Financial Services in the UK
Just to remind everyone of a few definitions here…
‘Regulated financial services’ in the UK are products and services that are supervised by government bodies to make sure they’re “fair, safe, and transparent”. They include things like insurance, wealth management, banking, building societies and financial advice.
These firms are particularly closely scrutinised because they are key to a smooth running economy.
On top of this, financial services products are often complex and confusing, the consequences for the consumer of getting it wrong can be life-changing. People might not know what they’re getting into, which could lead to problems. We have, as marketers of these products, a significant responsibility.
The two big organisations overseeing financial services promotions in the UK are the Financial Conduct Authority (FCA) and the Advertising Standards Authority (ASA).
The ASA, though applying to all advertising, has specific rules for financial services that ensure they aren’t misleading or harmful.
Meanwhile, the FCA’s job is to make sure firms follow the rules, protect consumers and promote competition.
Firms must also provide enough information to help consumers make informed decisions, including any risks and fees involved.
Examples of key rules and their origins are:
Promotions must be clear, fair, and not misleading, and provide balanced information about financial products or services. False claims cannot be made and important information cannot be omitted. (CONC and ICOBS)
Consumers must be provided with adequate information about the risks and benefits of financial products and services, including fees and charges, as well as any associated risks. (DTR and ICOBS)
Claims made in ads must be substantiated and not breach any laws or regulations. Ads must also not be offensive or harmful, discriminate against any group of people, or promote irresponsible financial behaviour. (ASA Advertising Codes)
So, yes, there’s a lot to think about. Regulated financial services in the UK are subject to strict regulatory oversight to protect consumers and maintain market stability. The FCA and ASA are responsible for overseeing financial services promotions and have guidelines in place to ensure that firms comply with regulations and provide clear and fair information to consumers. It’s all there for very good reason of course, we’re protected by these regulations as consumers every day, but it doesn’t make them easier to manage as marketers.
Don’t hang up your financial services marketing hat just yet though.
How can financial services marketing work with regulation?
You would be forgiven for being somewhat rattled by the combination of large regulatory bodies and sophisticated but daunting advertising options. However, before the financial services marketers quit their jobs to retrain in something less complex, like brain surgery. And, before the compliance teams descend upon the marketing department with pitchforks and permission from IT to turn off their internet, read on. There’s a way through it.
First and foremost, it’s easy to break rules you don’t understand, or don’t even know about… but, it’s no defence.
Experienced digital marketing professionals who know how to get the best outcomes for both financial services customers and the business objectives can absolutely navigate these seas.
If your team is primarily in-house, ensure there is clear communication and training, not just for the marketers, but also the compliance team, on the options available.
Consequence and opportunity in compliant digital marketing need to be recognised on both sides of the team. Not everyone is born experienced, of course, so new execs need to be trained not only in the regulation, but how it practically applies to the marketing tools available.
If you’re working with a digital marketing agency, how often have they spoken to you about regulation, does it come up?
Many non-financial-services-specialist agencies can stumble when confronted with a regulated product like insurance or loans. After all, the burden of evidence for “great savings” is a lot higher for home insurance than it is for a pair of trainers.
Are they constantly being pulled back from unrealistic, or worse, risky ideas, or are they completely avoiding new features in order to play it safe and easy? Either way, it will cost you a lot of money in the long run, so ensure your agency is the right fit for your vertical.
Speed through process is the secret to an effective marketing team, and never more so than in financial services.
A clear approval process, with reasonable thresholds for checking (how frequently marketing communications are checked, the type of messaging, the target audiences that are particularly sensitively handled, etc.), and succinct documentation of decisions (both by the marketer, but also the compliance liaison) can help campaigns get to market with less friction.
No business is the same, and no process is perfect, so periodic check-ins to ensure all parties are getting the best from the process are ideal. Remember that both compliance and marketing represent a dimension of the customer’s interests. You’re on the same side!
If you use an agency, do they have a relationship with your regulatory teams? Have they met them? Whilst ultimately the marketing team represent the agency internally, there’s no harm in mutual education between these teams to ensure great outcomes for all.
Another key thing to implement is a “what’s new?” dialogue between yourselves, your agency, and your compliance team. Has a great new feature just hit Google Ads? Is a new regulation incoming that may mean a change to existing processes? Has there been a recent penalty handed out that may mean we need to audit our own approach to check it’s still appropriate? This open information exchange makes all parts of the team more robust.
If we consider digital marketing channels as technologies, for a moment, we can then apply the features of those technologies to mitigate risk, without sacrificing performance.
Search Engine Optimised Content
Great news, clear, jargon-free content that doesn’t turn off or confuse the consumer is great for both the ASA, the FCA and SEO!
Once the alphabet soup has settled, we can see that it’s all in the interest of the consumer getting the information they need at the end of a search for a financial product.
Straightforward messaging is one thing, but is it compelling, helpful? “Thin” content with no authority, no guidance or value to the consumer beyond click bait is bad for all concerned.
If you consider E.E.A.T. (Expertise, Experience, Authority, Trust), you can ensure you are providing value that financial service customers are seeking, as well as boost your organic rankings. Working with the right SEO and content writers can help you in more than just hitting that higher position.
What about when that content gets old? Do you have the right steps to clean up? Whoever is looking after your content needs to be able to remove it as soon as it’s no longer the most timely information for your customer (outdated substantiations or pricing messaging for example) for that you need Google’s Content removal tool and a rigourous checking process, advance advising those responsible for your content when it’s time to be updated or removed.
Do randomised PPC ads scare the life out of you? If so, the good news is, with careful management, even RSAs can be a made a lot more predictable.
Without throttling your options for creativity too far and maintaining your test and learn, you can use pinning to bring down those options into manageable numbers faster than you can say “consumer duty”.
Even then, that’s a lot of variants. So, a process of creating high confidence that a misleading combination isn’t possible is key to using RSAs. Ensure titles standalone and that descriptions don’t need a heading to be factually accurate, or can’t be mixed with one that would make them so.
Targeting is understandably an area where experience and expertise, especially in the use of first party data, can help keep a firm on the right side of both FCA, PRA and ICO principles.
Protecting vulnerable customers runs through many of these regulations, and is just as critical as targeting the right ones. Use clear processes for sourcing these audiences, and strongly documented decisions as to why these segments have been created, therefore evidencing a desire to show relevant content based on the audiences’ need.
Looking for more insights or support?
In many ways, the strengths of digital marketing are the same things that can be perceived as putting financial services companies at risk of breaching regulations – speed to market, capability of scaling quickly, rapidly adjusting to improve performance and the ability to laser target messaging.
Yet these are features that can be used to not only assist the growth of the business in an effective and efficient way, but can also be used to protect the customer from irrelevant communications, confusing messaging, outdated content.
With the right partner, and the right team, financial services companies don’t need to fear the tools at their disposal, but embrace and understand them for the good of the business, and the customer. That’s where Balance can help.
If you’re looking for a marketing agency with a finger on the financial pulse, we’re here to help. Get in touch with our experienced team today to learn how we can become an extension of your marketing team.