Business Marketing

The Marketing Of Financial Services


The lucrative field of financial services includes areas such as banking, insurance, securities trading, and financial planning to list just a few. Yet, despite their highly valuable nature, financial service is a very difficult area to market to consumers. This is due to certain unique challenges faced by the financial sector that marketers of most other products, like consumer electronics, don’t face. These unique challenges include the highly complicated subject matter, the relatively mundane nature, and the inherent difficultly in presenting the subject matter visually, a medium in which advertising is most commonly found. Yet, despite these challenges, the marketing of financial services remains an intriguing topic due to the wealth of data already accumulated in this subject, and the highly predictable behavior of potential consumers.


After the catastrophic collapse of the financial services industry at the start of the Great Depression, regulators in the U.S. quickly instituted stringent regulations that limited the marketing of financial services that commercial banks could legally offer to consumers. Although, many of these regulations have since been lifted, financial services marketing must continue to remain careful about which services they are allowed to sell and to whom.


In recent years, regulations concerning the marketing of financial services sector have once again been strengthened, resulting in quickly shifting marketing conditions. The Federal Trade Commission, the Securities and Exchange Commissions, and many other governmental departments at the state level, are all responsible for enforcing the dozens of regulations that rule the industry in the U.S.

Tips and Comments

The marketing of financial services continues to change as new entrants have emerged in the field to compete against the old guard. For example, Volkswagen began to offer home equity to the public in 2004.

Since the 1970’s, in the U.S., wealth disparity between the wealthy and the poor has continued to grow. As the wealthy become even richer, and the poor become poorer, the idea of “two-tier marketing” – approaching the 2 separate wealth groups with different marketing tactics -- has become accepted as the industry norm.

To most consumers, the price of any given financial product is the most visible, and critical, element involved in the marketing of financial services. Therefore, product promotion must effectively communicate the product’s other elements – such as market positioning, and identity -- to the customer. A policy of simply lowering the price of any particular financial product can backfire as other competitors may follow suit, resulting in a spiraling profit environment for all companies involved!

Another complicating factor in the marketing of financial services is the problem that consumers’ recall of past prices can be quite low. This is due to the mundane and complicated nature of the financial industry. For instance, many people can’t remember how much the ATM transaction fees, or checking account maintenance fees were recently. Therefore, costumers may not be able to fully appreciate any lowering of the prices for goods and services which you might be offering! Marketing of financial services must take this insight into consideration while evaluating prices for their services.

By Stanculescu Mihai Bogdan, published at 02/16/2012
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