Digital marketing moves quickly, and marketers across every sector know that tactics and regulations can change overnight. But the stakes are especially high for financial services businesses.
Imagine an ad for a new credit card, loan, or investment. It might seem like just another promotion on the surface, but it could have a major impact on a consumer’s long-term financial future — which is exactly why financial services marketers face a unique challenge (and unique regulations).
Before launching any campaign, these marketers need to make sure every box is ticked: Does the ad meet the FTC’s truth-in-advertising guidelines? Is it compliant with data privacy laws, like GDPR or CCPA? What about FINRA’s guidelines on fair representation?
Failing to check just one of those boxes can result in major fines, legal repercussions, and damage to the company’s brand.
As marketing evolves, compliance regulations are continuously updated. These regulations are critical for protecting marketers and consumers, but they can also complicate the review and approval process.
Below, we’ll outline the top challenges of marketing compliance in financial services, plus some of the most important regulatory bodies to be aware of. Stick around — we’ll also walk you through how to ensure marketing compliance in your financial services business.
Challenges with marketing compliance for financial services
Marketers for financial services companies face some unique obstacles when it comes to marketing compliance, including:
- Regulatory complexity: One of the biggest hurdles financial services marketers encounter is deciphering all the complex regulations. Various governmental bodies, including the SEC and CFPB, impose a web of regulations, which differ based on the company’s product or service and jurisdiction.
- Cross-border challenges: Financial institutions operating across borders have to navigate regulations that vary by country and jurisdiction. Since those rules are always changing based on technological advancements and market shifts, financial institutions must ensure they understand and follow all compliance requirements in every operational area.
- The need for robust compliance infrastructure: Not only do financial services firms have to adhere to complex regulations, but they have to stay consistent. When using multiple marketing channels, each with its own set of regulatory requirements, having a strong compliance structure helps companies maintain consistency across platforms.
Key financial marketing bodies and regulations to know
If there’s a who’s-who in financial services, the financial marketing bodies are at the top of that list. They’re the ones calling the shots to regulate and guide marketing practices within the industry. Here are some of the top ones to know.
GDPR compliance
The General Data Protection Regulation (GDPR) sets strict rules for processing E.U. residents’ personal data. Companies that operate within the European Union or serve E.U. customers must comply with GDPR or face severe penalties, including fines of up to €20 million or 4% of global annual turnover.
Introduced in 2018, the law helps build trust with clients. Marketers that comply protect customer privacy and data security, safeguarding consumer information from unauthorized access or breaches. They also protect themselves from large fines and unethical business practices.
U.S. Securities and Exchange Commission (SEC)
The SEC enforces federal securities laws and regulations, including how companies market and advertise securities and investment products. Financial institutions must provide clear, accurate disclosures in their marketing materials. If a product involves risks, fees, or potential conflicts of interest, the company has to disclose them.
In 2020, the SEC adopted a new marketing rule, modernizing financial regulations for investment advisors. Under the new rule, investment advisors can now use testimonials and endorsements in their marketing content. The SEC has also provided updated guidance on using social media platforms for financial promotions in recent years.
Consumer Financial Protection Bureau (CFPB)
The CFPB focuses on preventing unfair, deceptive, or abusive (UDAAP) practices in financial marketing. They actively enforce consumer protection laws and take action against financial institutions and service providers that stand in violation.
The CFPB also holds digital marketers who act as service providers liable for committing unfair, deceptive, or abusive practices like sophisticated behavioral targeting.
In 2023, the CFPB filed 29 enforcement actions and resolved six previously filed lawsuits, resulting in approximately $3.07B in consumer compensation and $498M in civil money penalties.
Federal Trade Commission (FTC)
An independent agency of the U.S. government, the Federal Trade Commission plays a critical role in protecting consumers and promoting fair competition in the financial services sector.
The FTC enforces laws against deceptive advertising and unfair practices in financial marketing. This includes scrutinizing the claims financial institutions make in their ads for financial products and services. They also provide guidance on online advertising practices, including native advertising and social media marketing.
Truth in Savings Act (TISA)
According to the Truth in Savings Act, financial institutions must disclose information about deposit accounts to consumers. The law applies to all depository institutions (except credit unions) that offer deposit accounts in any state, such as banks, savings associations, and U.S.-based branches of foreign institutions.
In their marketing materials, marketers must use specific terms like “annual percentage yield.” All advertised terms must also accurately reflect the account’s legal terms, including minimum balance requirements and any fees associated with the account.
Truth in Lending Act (TILA)
The Truth in Lending Act requires financial institutions to provide clear, accurate, and standardized information in their advertisements and disclosures. Before consumers sign contracts, lenders must provide disclosures about the terms, interest rates, and fees for deposit accounts and loans.
Like the TISA, the TILA regulates how marketers can advertise accounts and loan products. It promotes transparency in marketing and enables consumers to make more informed decisions about their finances.
Financial Industry Regulatory Authority (FINRA)
FINRA enforces rules governing broker-dealers and registered brokers in the U.S. Their Advertising Regulation Department helps protect investors, ensuring broker-dealer communications follow fair, balanced advertising rules.
In addition, FINRA enforces advertising rules from multiple regulatory bodies, such as the SEC, the Municipal Securities Rulemaking Board (MSRB), and the Securities Investor Protection Corporation (SIPC).
FINRA Rule 2210 is an important rule that establishes content standards for communications. This includes requirements for fair, balanced presentation, disclosure of risks and limitations, and prohibitions on false or misleading statements.
The agency also oversees how financial firms use websites, email, social media, and other electronic communication.
Steps to take to ensure marketing compliance in financial services
Is thinking about all these governing bodies and regulations making your head spin? Marketing compliance doesn’t have to bring your current reviews and approvals workflow to a screeching halt.
Below we’ve outlined some steps to help you keep projects flowing while maintaining advertising compliance.
1. Understand applicable regulations
Are you an agency that works primarily with financial advisors? Do you handle internal marketing for a large bank? Do you know which rules apply to each of these situations?
A detailed understanding of all relevant marketing regulations will keep your marketing activities in check. So determine which regulations apply to your financial products and services or your target markets first, so you can ensure all your deliverables comply from the start.
2. Build a compliance strategy
Every financial institution or agency working with financial institutions needs a strong compliance strategy enforced by software and tools with robust marketing compliance features.
This strategy should outline the policies, procedures, and best practices to help your organization remain compliant. It should also govern how your institution maintains compliance while working within your brand framework and marketing strategy.
3. Establish a robust review and approval process
How will you ensure all marketing materials meet compliance standards before they get blasted out in an email or posted to social media? This is an important question financial services marketing teams must ask themselves.
Compliance is a critical step in every creative workflow, and it should be part of a comprehensive review and approval process.
Audit trails and electronic signatures can help keep everyone on the same page and provide full visibility into that process, preventing compliance mishaps from rearing their ugly heads. You’ll know the right compliance reviews have taken place before your marketing materials get released into the world.
4. Train and educate your team
You can’t expect your team to follow compliance requirements if they don’t understand them. Regular training and education give your marketing team the information they need to spot compliance issues and prevent violations from happening in the first place.
Audit trails also make it simple for teams to track the approval process and identify steps to resolve any problems.
5. Stay updated on regulatory changes and trends
Trends toward tighter marketing regulations and increased protection of customer data privacy will likely continue. This means financial services marketers will have to roll with the ebb and flow of regulations.
Keep a close eye on how new regulations might impact your marketing efforts. As regulations change, don’t be afraid to update your existing workflows to simplify the marketing compliance process.
6. Implement a robust compliance tool
As laws and regulations change, you need a tool to help you stay on top of it all. Compliance management tools that automate monitoring, reporting, and tracking can help you maintain consistency across marketing activities. They allow you to keep projects moving while ensuring no one drops the ball on compliance.
Ziflow is well-suited for the financial services industry, allowing teams to build compliance-ready workflows for all their creative projects. You can ensure the right decision-makers take part in the compliance process and stay informed about which reviewers made changes or approved assets.
Ziflow also makes brand compliance easy by giving teams the tools they need to deliver a consistent brand experience across every asset and campaign.
Ensure and maintain marketing compliance with Ziflow
Marketing compliance in the financial services industry means a lot of extra hoops to jump through. But you don’t have to exhaust your marketing team by adding unnecessary red tape. With the right tool, marketing compliance becomes a seamless part of your creative process.
Ziflow can automate your compliance workflow so you can ensure your marketing and creative teams meet financial regulatory compliance requirements every time. With powerful features like e-signatures, audit trails, and detailed activity logs, you get the advanced visibility and control you need for continuous, simplified compliance.
