Who said financial institutions don’t need marketing? A decent promotional strategy with digital marketing and triggered direct mail can help banks continuously engage new customers and keep existing ones. It’s essential for growth and successful market expansion.
Yet before strategizing tailored campaigns, you should note one thing. The financial industry is regulated with dozens of state and federal laws. They determine the rules of bank marketing and advertising regulatory compliance. Most crucially, these regulations entail severe penalties in case someone fails to meet them.
If you don’t have a compliance team to validate your advertising compliance, make sure to do it yourself. By covering the main financial advertising regulations, you will market safely and enhance your customer service.
To find out more about bank marketing and advertising regulatory compliance and get expert tips on how to achieve it, read our article on:
- Key financial advertising regulations that may impact your marketing choices
- 5 tips on how to ensure bank marketing and advertising regulatory compliance
- Direct mail automation in bank marketing: How it works and why automated mail is good for compliance
Key Financial Advertising Regulations that Decide Your Marketing Choices
When it comes to financial services marketing, you need to act proactively. Once you know the limits and requirements for bank marketing and advertising regulatory compliance, it should be easier to design a promotional strategy that encourages customers to convert without violating their rights. To give you some guidelines, here’s a brief overview of the fundamental financial marketing regulations you should consider:
In 1914, this act established the Federal Trade Commission that became the main body to regulate unfair deceptive or abusive acts or practices (UDAAP) in the US. Later, it was expanded with additional financial advertising regulations and legislative norms for other businesses. Financial institutions should pay particular attention to Section 5 of the FTC Act which determines what practices are forbidden in the banking industry. Generally, according to the FTC Act:
- Advertising and marketing must be truthful and non-deceptive
- Advertisers must be able to back up their claims with evidence
- Advertising mustn’t mislead consumers or be irrelevant
- Advertisers mustn’t take advantage of consumer’s lack of understanding of the subject matter or inability to protect their interests
This federal law was passed as a part of the Federal Deposit Insurance Corporation Improvement Act in 1991 and implemented by Regulation DD. Its key purpose is to ensure consumers receive reliable information on deposit products, interests, and fees. Banks should allow customers to make an informed choice by staying transparent in their marketing communications. For instance, if a financial institution promotes a 5% cashback in its social media post, it must link to detailed, accurate, and readable terms of service.
The two acts are quite similar since both fall under the category of financial advertising regulations and protect consumers against discriminatory practices. The FHA and the ECOA prohibit discrimination in real-estate and credit transactions based on race or color, national origin, religion, sex, marital status, and age. That’s why to ensure bank marketing and advertising regulatory compliance, financial services should select the message that suits a broad target audience.
These financial advertising regulations relate to banks, credit unions, and other financial institutions that use telemarketing, including fax and phone. Whereas fax as a marketing channel has sunk into oblivion, phone calls remain a popular way to promote banking services. To stay compliant, make sure to contact only the customers with whom you have established business relationships, call between 8 a.m. and 9 p.m., keep internal do-not-call lists, and follow the National Do Not Call Registry.
Apart from the mentioned financial advertising regulations, there is also GDPR that regulates data processing and marketing practices of any organization that handles data of the EU citizens. You could be also subject to other compliance requirements depending on the type of financial services provided.
5 Tips on How to Ensure Bank Marketing and Advertising Regulatory Compliance
Even though each regulation imposes specific limitations, they all center around the idea of customer privacy as well as transparency and relevance of marketing communications. That’s why several universal tips can help you achieve a comprehensive bank marketing and advertising regulatory compliance.
# 1. Keep your message especially clear for bank marketing and advertising regulatory compliance
The easiest way to achieve bank compliance is to stay honest. Focus on what your financial institution can really do for consumers instead of promising them benefits you cannot actually provide. Be sure to include the terms of the offer on all marketing materials you deliver both online and offline.
#2. Never discriminate or forget to include your bank’s customers in your financial advertising
As we have already mentioned, non-discriminatory marketing practices are crucial to meet the compliance requirements of the FHA and the ECOA acts. Hence, your marketing strategy shouldn’t be tailored to a narrow privileged target audience. Your advertising should be inclusive in terms of messaging and design, be representative and appeal to people from different backgrounds and groups.
#3. Personalize your marketing communications to meet financial advertising regulations
You don’t need to bombard people with cold emails or unexpected calls. Learn the preferences of your customers with surveys and marketing analytics software. This will help you avoid breaching the privacy of customers with unsolicited communications and make your marketing efforts more effective.
#4. Give customers a choice for bank marketing and advertising regulatory compliance
To stay compliant, you must align your advertising plans with the National Do Not Call Registry and Do Not Mail List. Besides, it’s necessary to allow customers to opt-out of your email newsletters and other communications. This will not only help you meet legal requirements but will also make your advertising messages more relevant.
#5. Take care of bank marketing and advertising regulatory compliance across all channels you use
Regardless of whether you are sending an email or using direct mail automation, you should follow the rules. Besides, it’s necessary to be able to prove that your marketing practices don’t breach the law. To do that, keep a record of every message you share through social media, emails, phone, mail marketing, and other channels.
Direct Mail Automation in Bank Marketing: How It Works and Why Automated Mail Is Good for Compliance
Mail marketing is renowned for its excellent response rates and effectiveness in financial advertising campaigns. With direct mail automation, this channel also becomes highly secure and regulatory compliant. Mail automation software, like Inkit’s marketing automation and vendor connection platform, minimizes human access to customer data and enables companies to start sending direct mail based on triggers. Apart from increased personalization and security, direct mail automation brings a range of other bank compliance benefits:
- Inkit’s direct mail automation tool provides rendering functionality to store all financial communications delivered to customers
- Inkit’s direct mail automation software is GDPR compliant and meets other financial advertising regulations
- Inkit’s direct mail automation tool generates a separate profile for each customer. Thanks to this, financial institutions and regulatory bodies can view the history of communications when necessary
- Inkit’s direct mail automation software can be integrated with risk management tools, CRMs, and other third-party services. This enables banks to better manage customer data and implement fully automated marketing
Interested in compliant direct mail automation provided by Inkit? Contact us with any questions you have.