Marketing and Compliance Report

2017

At Social Assurance, we have relationships with over 1,400 financial institutions nationwide. Our mission is to provide financial compliance and marketing teams the tools that they need to Market with Confidence. In 2017, we conducted our first annual survey with community banks and credit unions to evaluate the marketing and compliance climate in the financial services industry. These results can help all financial brands gauge their position and direction when it comes to marketing and compliance. The goal of this report is to help brands better understand how they compare to other financial marketing and compliance teams and procedures as well as in setting up their own processes objectives.

Here’s the details around the data including when it was gathered and the representation of the survey respondents.

The Survey Group

Conducted May 2017 85 respondents Professional roles included: Marketing (62%) Compliance (18%) Financial administrators (17%) Other (3%) Bank size of those surveyed: 0-500,000 Million (67%) $500 Million - $1 Billion (19%) 1 Billion + (14%)

Hello!

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While there is always value in promoting your products, most financial brands are investing their marketing efforts and budgets in community marketing. Results show that 38% of financial brands are placing their dollars equally in community and product promotions, 40% are primarily focused on connecting with their community. Less than 17% have their marketing budgets weighted more towards promoting their product and brand.* Overall, 78% are investing half or more of their marketing budgets in connecting with their community.

For brands that have moved to marketing on social media (11% were not currently on social media), community was also their focus of social marketing. For those on social, 95% use social media for community engagement, 76% also concentrate on overall branding, while 61% are venturing to promote product on social media.

So obviously, what we take away from this is that community banks and credit unions place a high value on connecting with their communities through their marketing efforts. While this is the right direction to focus marketing budgets, the question that is raise is, “Why are some financial brands so reserved to market their products?”

* 6% of responders were unsure of the marketing budget investment proportions.

How Financial Brands are Branding Themselves

Where Compliance Gets Tough for MarketingFinancial marketing compliance is a necessity in the financial world. With the intent of protecting the consumer by clearly and simply explaining things, financial institutions must review, comprehend and adhere to lengthy and occasionally confusing regulations. Compliance experts are necessary and crucial in ensuring that bank and credit union marketing teams are complying with all regulation line items. While most financial brands (68%) are managing compliance internally, several (32%) are leveraging 3rd party vendors for part or all their compliance management.

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When asked what regulations they focused on the most, 62% ranked UDAAP compliance as one of their top focus areas, 55% said CRA credits and 32% stated that the upcoming ADA website guidelines had their attention. So how do these regulations impact marketing efforts?

Responding banks and credit unions shared, that they have the traditional (print, broadcast) marketing compliance down. Overall, there were low areas of concern when it came to managing marketing compliance for: Print marketing – 17% Broadcast radio – 8% Broadcast television – 13% Community marketing – 13% Outdoor advertising – 0%

For the marketing methods that have been around for years, financial brands have established processes, and regulatory compliance is fully caught up and in line with how traditional marketing messaging can be conveyed. However, when it comes to digital media that is continually evolving and changing, this is where you find the gray areas and where regulators are constantly catching up. Digital media appears to be the area where the most significant concern is for marketing compliance.

Digital marketing concerns where the responses clicked on most for the survey. When asked about digital media, 20% said email marketing and 27% stated website compliance were some of their top challenges to manage

Traditional Media

Digital Media

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What we all know to be true is that established (and practiced) processes can mitigate or absolve compliance risk. However, when we asked financial brands about their marketing compliance processes, 24% said it could be a bit discombobulated and could use some improvement. Another 60% felt they were doing okay with their compliance and marketing communications, but felt that there was potential for improvement.

Digging in deeper, here is where most said their processes could improve:

Compliance Process

from compliance perspective. With a few decades under their belt in these mediums for regulators and financial brands, both groups appear to have a pretty good handle on the best processes and practices for regulating and managing websites and email compliance. However, as the mediums begin to evolve and integrate with new communication methods (like social and messengers) they will face additional regulation potential.

While most financial brands see the value of engaging in social marketing, most spend a chunk of their time managing it from a compliance perspective. Of those on social media, 71% stated that is was one of the most the most difficult areas to manage from a compliance perspective. That same percentage stated that social promotions was one of the top marketing areas of focus for their compliance teams. So, while social marketing is definitely worth it, banks and credit unions are devoting a large portion of their compliance efforts in managing it.

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When promoting products, some are a little less stressful for compliance than others. Here are the top three product areas that respondents had the largest compliance concerns:

Product Concerns

Measuring effectiveness of your compliance processes all leads to one place: The world of reporting and audits. By keeping all of your ducks in a row with process and technology, things like reporting and audits should be easily automated and consume only small amounts of your time. Being a marketing compliance management tool provider, we are kind of huge cheerleaders for investing in these kinds of resources. Only 28% of our respondents were currently utilizing a compliance marketing management software application and 29% said they didn’t think they needed one (they just don’t know they do). The remaining 43% admitted to not having one in place, but that it is something they are planning on investing in.

Audits and Reporting

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Compliance Marketing Management Software Application

When it comes to storing their marketing collateral, respondents still have a ways to go in maximizing their records organization and simplifying reporting potential. Nearly half of respondents are trying to control records management with system drive folders. However, this method can fall short in tracking processes and offers no reporting capabilities. A notable 33% of respondents are still using paper and binders to archive their marketing collateral.

Sorting and Reporting

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Only 9% of banks and credit unions are using records management software to store and manage marketing collateral. This tells us that while 28% have a content and approval tool, only 9% are using these resources for records management (see above). By leveraging these tools, brands can ensure that process workflows are established and adhered to from a compliance perspective. It additionally minimizes the overall time and effort, as well as potential for errors and misplacement of collateral.

Successfully preparing for audits is all about records management and reporting. With the right processes in place, audits should go off without a hitch. However, when taking a step back, most banks and credit unions (63%) feel that they could improve upon their audit preparation processes. The need for improvement is most likely due to the fact that while audits are stressful, they only come once or twice a year, so it is easy to be distracted by other fires until you are scrambling to get things together (Kind of like doing your taxes).

In an ideal world, gathering information for a marketing compliance audit should take a few hours or less. You already did the work, there should be no reason to put in additional time. When asked how much time they devoted in audits, 52% of banks and credit unions said 10 hours or less of audit prep time and 26% said 11 or more hours in each audit. About 22% stated they didn’t keep track.

Nearly half face external audits annually and 41% step up for internal ones annually. Just over 10% commit to biannual internal and external audits. Internal audits seem to get the least amount of attention with 23% stating that they conduct them semiannually or flat out don’t’ have time for it. (Note that the missing percentages are from those who were unsure.)

Audits

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What Does This All Mean?

About Social Assurance

The objective of these results is to allow financial marketing and compliance teams to step back and think about where their processes are currently. Not only to compare it to the position of other brands, but to compare it to where they are and where they would like to be. Step back and ask yourself: Are your compliance and marketing processes where they need to be? Are you marketing how you would like to on digital media? Do you focus or spend too much time on audits? Could you be leveraging tools to improve and simplify your approval,

If you answer no to either of the first two or yes to the second two, then we recommend that you set a goal to determine in the next six months on how you can improve your processes. With the right tools and procedures in place, managing your marketing and compliance processes and audits can be a smooth and painless for both teams.

management and auditing procedures?

Social Assurance is a software solutions provider geared exclusively to providing financial brands with solutions to manage their marketing processes and procedures. Social Assurance is one of the only industry providers offering brands the ability to manage their digital (including social accounts) and traditional marketing materials and processes in one location. The platform solution provides for documentation process, approval, archiving, reporting and auditing as well as digital monitoring. We provide financial institutions with software, process, content and strategy needed to

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Market with Confidence.