Social media promotion in financial services is one of the hottest topics for marketing teams right now, not least because of the Financial Conduct Authority’s ongoing work in the area.
Influencer marketing, in particular, is more commonly associated with the world of fashion and luxury goods than it is with financial promotions, but that is starting to change, and banks, insurers and investment companies want in on the action.
The runaway success of fashion brand partnerships linked to TV shows such as ITV’s Love Island have established certain connotations with influencer marketing. And many marketers are unsure of how to harness social media influence. But this hasn’t stopped companies testing out new methods.
Unfortunately, this hasn’t always gone well and social media promotion has become the latest area of significant scrutiny by the UK’s financial watchdog.
In its consultation guidance released in July 2023, the Financial Conduct Authority underscored the scale of its concern with how regulated financial businesses are using social media to market their products.
“In Q4 of 2022, 69% of financial promotions, which were amended or withdrawn following our intervention, involved website or social media promotions,” the FCA said.
“This data tells us that consumers using social media to inform their financial decision-making will likely have seen promotions that are unfair, unclear or misleading in some way.”
An explicit concern listed by the regulator was where financial services businesses use influencers to promote their products or services, without the individual in question being guided on the FCA’s rules on financial promotions.
Rosie Hooper, a spokesperson at Quilter, says the FCA’s increased scrutiny of influencers is much needed, although it is making it harder for promotions to be approved.
“This is long overdue given the spate of social media posts over a number of years that have lured people into high-risk schemes.
“This crackdown is particularly needed during the cost-of-living crisis as people are more likely to turn to alternative sources with the promise of high returns without keeping their eyes open to risks involved.”
Be warned
It is not the first time that the regulator has flagged concerns about the use of influencers, but the depth of detail in this latest consultation should act as a flashing red warning for marketers that haven’t heeded previous announcements.
In February, the FCA strengthen its rules for investment-related financial promotions on social media with an ongoing monitoring requirement, which means that companies now need to ensure that promotions remain compliant “for their lifetime”.
This includes keeping a record of all promotions and logging that they require “no material change” every three months.
Not just B2C
While much of the focus of the regulator will be on consumer-facing promotions, the B2B world are also waking up to the potential that exists from endorsement marketing.
Sophia Bhaumick (pictured) was previously a marketing manager at Charles Taylor InsureTech who recently took up a new role at WTW.
She explains that financial institutions are often keen to embrace influencer-led marketing, but are still unsure on the approach. That, she hopes, is something that will change.
“Within B2B, we call it ‘influential marketing’. The term ‘influencer marketing’ coined a bad reputation in B2B due to the association with celebrity endorsements. Influencer marketing from a B2B perspective is much more about reporting experiences and finding testimonials that businesses can leverage.”
While B2B marketers in financial services are curious about how influential marketing can broaden marketing campaigns, knowledge levels at a strategic level vary considerably, both by company and sector.
But, for companies that get it right, the rewards are significant. The most successful strategies within financial services are integrated with the broader sales and marketing strategies and are structured with rules, measures and a clear distinction between experienced-based and endorsement-based approaches.
“There is an assumption that you allow people to say what they want and forget the rules,” Bhaumick says.
“But the messaging you put out has to be specific and there has to be guidelines. You must tailor the language to each stakeholder, which can mean rewriting the guidance three or four times over for different audiences.”
Influence v endorsement
These approaches, she says are equally applicable to marketers in B2B as they are in consumer-facing businesses. She adds that it is important for marketers to distinguish between influential marketing (which relates to experienced-based promotions) and endorsement-based content.
“Experienced-based relates to the messaging that comes from clients or customers. Endorsement-based is where you go with recognised authorities, such as leaders within your industry,” she says.
Bhaumick’s recent year-long stay at Charles Taylor has underscored the potential that exists within influential marketing.
Her work has allowed her to work alongside technical specialists to create employee advocacy-led campaigns, but also to observe industry professionals who are already showing what is possible.
She cites Clare Knight, CEO of the Delegated Authority Exchange, as an inspiration. Like Bhaumick, Knight used her time working in the London insurance market as a springboard to produce informed, influential marketing on social media platforms.
“The way she writes on LinkedIn is disruptive and controversial,” Bhaumick notes, “but it has created this incredible network of opportunities for her.
“Charles Taylor and the Managing General Agents’ Association (MGAA) ran an event on imposter syndrome for young professionals and Clare, with [Charles Taylor employee] Arandip Sahota, drew an audience of 70 from their presence on LinkedIn alone.”
Bhaumick says it is entirely logical that B2B companies are interested in the potential from experienced-based influential marketing, at a time when so many marketing strategies are based on transformation themes.
“From my time working in insurance, I’ve noticed there are numerous companies in the Lloyds market trying to break bureaucracy, which is incredible. But there is an easy way of doing this and that is through influential marketing. “It is about telling your people that ‘I want your voice’.
“It tells them that you value them. Empowering internal stakeholders is massive right now and people buy from experience.”
Employee-led marketing
Harnessing employee knowledge and experience in marketing is tried and tested, but in influential marketing, many B2B companies are only just at the beginning of their journey. The increasing regulatory scrutiny of the consumer sector by the Financial Conduct Authority has heightened risk awareness.
While the probing of social media promotions has, so far, been focussed on campaigns to consumers, having a structured approach is key to protecting against all risk in campaigns – B2B or consumer-focussed.
In the case of employee-led influential campaigns, this can be a particularly tricky challenge, Bhaumick explains.
“From an employee perspective, you must be so careful what an employee shares about the company. In some cases, employees may share information that’s off-brand or inaccurate and companies need guidelines and policies to educate employees and protect their brand reputation.
“If an employee breaches the guidelines, it is the marketing team’s responsibility to manage that. Controlling through a crisis communications strategy is something that should be a part of every single business and not just through the PR channel.”
Bhaumick adds that when things do go wrong it is essential to have a clear procedure in place to manage alterations quickly and effectively. But rules are not purely there for internal stakeholders.
External endorsement partners, also need to understand the guidelines, she says.
“It is important to have an explicit agreement from those parties that they will agree to the rules. If they haven’t agreed, no agreement is in place. A lot of companies don’t think about this.”
With both the Financial Conduct Authority and the Advertising Standards Authority continuing to probe the financial services industry and a consultation open until September so that the industry can make representations, external agency support in this growing area will be increasingly sought after.
What remains to be seen is whether industry innovation will be stifled by the regulatory response to a handful of bad actors this far. One thing that is for certain, however, is that the landscape for digital promotions – whether B2B or B2C – is set to continue shifting for a long while yet.