During the lockdown throughout the COVID-19 pandemic over the last several years, the interest from a wider consumer market in financial products increased massively as everyone with free time on their hands turned to reorganise their finances. This increased interest in financial health has continued into this year with around half of consumers in the UK having thought about or having already opened new accounts with a new provider this year that are not credit or debit cards. Now that the pandemic and the effects that it brought on the world are beginning to ease, consumers are becoming more confident and financial service providers are working hard to increase this forward movement by steering customers towards extra payment services and additional rewards.
Why choose affiliate?
Financial brands are now making significantly bigger financial investments in digital advertising and marketing after research has shown that around 54% of UK consumers are more likely to choose a new payment plan due to the rewards it offers, and around 60% of consumers are choosing cashback services. Brands are investing in trying to not only convert but also educate new and potential customers.
Although traditional banks of course have the financial resource advantage in terms of advertising, new banks are beginning to gain market share. The digital advertising environment is highly competitive and as a result, brands are looking to up their spending on digital advertising to over £20bn this year, which is well over double the £8bn spending in 2017.
The good news is that a good proportion of this advertising budget is set to be spent on affiliate marketing, which is an extremely cost-effective and results-driven form of advertising that has high ROI and is extremely effective at reaching new customers.
The issue is, however, that there has been a significant hindrance in terms of driving growth through affiliate marketing due to challenges that have been presented by the compliance.
The compliance challenges
Of course, every brand that is entering into an affiliate marketing space needs to be extremely vigilant in terms of consent and privacy, this is even more exaggerated for financial services because of the strict regulations that are in place for financial services and products. Responsible handling of data and personal information is not just desired but an essential part of any financial service. The compliance of affiliate marketing partners has in the past held back innovation in financial services.
Regulations put in place by the FCA as well as company compliance requirements should be carefully managed to ensure that publishers are compliant with the communication of offers. This means that in order for financial brands to effectively work in an affiliate channel, all strategies must be underlined with airtight compliance. This includes the close monitoring of the processing and sharing of data, tracking solutions, offer optimisation, recruitment of publishers, third-party site messaging and requirements for reporting. This will protect not just advertisers and publishers, but also customers.
In the financial sector, it is particularly issuers who are taking on the responsibility for any risks concerning finances, operations or legality that may come from partnerships with third-party organisations. This has meant that a lot of advertisers have been reluctant to engage with affiliate publishers because of the costs associated with monitoring and the risk of facing fines for non-compliance.
Working with networks where compliance is a priority
To overcome this particular challenge, financial service providers should make sure they are working with trusted affiliate partners who are able to demonstrate strong compliance processes and risk-avoiding technology. This will require a selection of experts in the financial services industry as well as automation of proprietary tools which can monitor the fast-changing compliance requirements.
After finding the right affiliate partner, financial advertisers will be able to optimise their messaging and scale their affiliate campaigns with confidence and trust.
Affiliate networks which are designed with compliance protection in mind will have several attributes. The first is the implementation of real-time monitoring and alerts which can identify any potentially fraudulent activity in a timely manner. The constant monitoring of content means that advertising is always in keeping with business requirements across every platform. It is also important for businesses to employ social listening to keep a track of brand sentiment which can flag up any potential issues and give space for change quickly. Finally, regular updates from each publisher and constant monitoring of this can help to ensure that there are no errors anywhere.
Overall, while consumers are turning more often to trusted third parties regarding financial offerings, it is more important than ever that financial brands are maintaining a strong presence on these sites. But even more important than this is choosing the right affiliate network. This will make sure that companies are confident in their reach and engagement of new customer groups while staying compliant with the regulations in place in the financial services sector. This results in an ultimate win for both brands and consumers.
