Content has become an increasingly popular tool for financial service brands to market themselves. With consumers digesting more online information than ever and organisations producing more content day-to-day, the risks associated to non-compliance are on the rise.
For instance, a simple Google of ‘what is a mortgage’ brings up hundreds of blogs about the state of home ownership, the mortgage pitfalls to avoid and educational pieces about the different kinds of products available. A lot of these are written by mortgage providers, showing that financial services brands have become smarter about getting eyeballs onto their websites and potentially converting readers into customers.
The success of this content-led approach is driving more financial services brands to create their own content and 74% of these companies expect to increase their in-house content creation going forward (with 61% of the industry already doing this), according to the fifth 'State of Play' report from Editions Financial's annual survey of global financial services marketers. However, while this gives brands a fantastic opportunity to speak directly with their target demographics, there are risks with this.
61% of content is currently created in-house and 74% of organisations expect to increase in-house capabilities in the future
- State of Play Report, Editions Financial
Regulated firms already have to contend with strict rules around financial promotions and the way these financial instruments are marketed to the wider public. Following numerous high profile scandals linked to misselling, the FCA will be watching out for firms that may be ignoring their duties and marketing irresponsibly.
This was evident in January 2019 when the FCA penned a letter to CEOs of regulated firms reminding them of their responsibilities in the use of financial promotions:
We’ve written before on the difficulty of marketing compliantly, especially when it comes to delivering personalisation (see our eGuide, The Compliant Marketer’s Ultimate Guide To Personalisation, to learn more) and this challenge isn’t going away.
So, how did we get here? In simple terms, the demand for digital content has led to a rise in digital content creation. In this new era, firms will need a strategy to ensure content is managed compliantly. Whether they need to adopt the right supervisory processes and technologies or maintain accurate records of communications, the risk of non-compliance will grow.
To create content in-house, many financial services brands are bringing on board professional writers and dedicated marketing staff. A lot of these people will be highly skilled at what they do and understand their market and subject matter perfectly. The risk comes when writers lack the knowledge and understanding of the subject matter they’re writing about, especially when content needs to be created with financial promotions compliance in mind.
'The cross-sector 2018 Digital Trends report found that organisations that are bringing content creation in-house are more likely to have exceeded their top 2017 business goal by a significant margin'
- 2018 Digital Trends in Financial Services, Adobe
For example, a skilled writer could probably write a high quality blog on UK equities with ease. However, could they do it in a way that is clear, fair and not misleading?
We're alluding to FCA COBS 4.2.1 which states that a communication or financial promotion must be fair, clear and not misleading. An understanding of what constitutes a compliant or non-compliant communication requires a certain level of understanding, without this and the right approval and record-keeping processes in place could potentially leave firms at risk.
And furthermore, you'd have to ask whether the writers have the knowledge to fully explain the cyclical history of UK equities, the socioeconomic factors impacting the market and the role UK equities can play in a balanced global equity portfolio?
When it comes to financial services promotions, the regulatory risks are real and so making this content both entertaining, insightful, yet compliant is a challenge that leaves little room for error.
Nearly half of millennials (46%) said their bank does not send marketing materials that are relevant to a future financial need
- The Financial Brand
Financial services brands that invest in content must cater for all of their audiences and do it well. Their younger customers must receive communications that have context, they must offer products that answer their needs. On the other end of the spectrum, more long-standing customers must also receive the same relevance.
Firms that own their future will also demonstrate ownership and accountability of their digital presence. They will understand where they fit in the digital world and adopt the necessary technology and processes to minimise digital risk.
Capturing and records of digital communications is a big component of this, along with the ability to audit and approve financial promotions. For example, how will you as a firm ensure website promotions and social media posts are managed from a compliance and regulatory perspective? If questioned, would you have web archives available and how would you demonstrate that you're a firm that endorses in ethical conduct, protecting the interests of your customers?
As digital channels continue to grow and the way firms communicate evolve, compliance requirements will adapt alongside. This is simply part of the regulatory environment that now exists, the fines we've seen issued by the regulator demonstrate the expectations for accountability and record-keeping.
The opportunities that in-house content creation affords for regulated firms are immense. If done correctly, firms will communicate to thousands of new customers, strengthen their brand proposition and potentially improve the public’s perception and knowledge of financial services. This requires a few things; highly skilled and knowledgeable content creators, adept and reasonable compliance personnel and the correct systems and controls in place.
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