Consumer interest in financial products boomed during the lockdown as many people who were stuck at home took the time to reassess their finances. It’s a trend that has continued into 2022, with data from Rakuten Advertising showing that half of UK consumers (50%) are considering or have already opened accounts with a new payments’ provider, outside of credit or debit cards, this year. With the pandemic easing and consumer confidence rising, many financial service brands are looking to build on this momentum by pivoting towards additional payments services and rewards.

Why choose affiliate?

With over half of people in the UK (54%) likely to select a new payment solution based on its rewards’ offering – and 60% of consumers opting for cashback services – financial brands are investing heavily in digital forms of advertising to educate and convert new customers.

Whilst traditional banks still have a resource advantage in this regard, new players in the financial space are quickly gaining market share. Given the highly competitive environment, it is no surprise that brands are looking to increase their digital ad spend to over $20bn in 2022 – more than double the £8bn spent in 2017.

When looking at exactly where this ad budget will be spent by financial services firms, a large slice is set to be pumped into affiliate marketing – a high ROI, results-driven way of reaching new customers (and upselling products to existing ones).

However, the ability for advertisers in this sector to drive growth through affiliate marketing has been hindered by challenges presented by compliance.

The compliance challenges

While every brand entering the affiliate marketing space needs to be sensitive of consent and privacy this is amplified for financial services due to the specific regulation of financial services and products. Being responsible with data and private information is not a ‘nice to have’ for these companies – it’s a make or break. Concerns over the compliance of affiliate publisher partners have previously stifled innovation in the financial services sector.

FCA regulations and company compliance requirements need to be managed carefully to ensure publishers and the communication of offers are compliant. For financial brands to work effectively through the affiliate channel, robust compliance must underpin the entire strategy. Tracking solutions, processing and sharing of data, publisher recruitment, optimisation of offers, messages on third party sites, and reporting requirements are all under the microscope to protect consumers, publishers and advertisers alike.

Issuers, particularly in the financial sector, always bear the brunt of the financial, legal, and operational risks that stem from third-party partnerships. Some advertisers have been deterred entirely from engaging with affiliate publishers due to the cost of monitoring and risk of fines.

Working with networks where compliance is a priority

To tackle this challenge, it’s essential that financial services work with an affiliate partner which can demonstrate that it employs robust compliance processes and technology to mitigate any risks. This is something that can only be delivered through a combination of financial services industry experts and automated proprietary tools to monitor the ever-changing compliance requirements.

Only once the right partner has been found will financial advertisers be able to scale and optimise the messages shared through its affiliate network with absolute confidence.

There are several attributes of an affiliate network designed to specifically offer compliance protection. Firstly, real-time monitoring and alerts ensure potentially fraudulent activity is identified immediately. Constant monitoring on content means that messaging is aligned to business requirements on all publisher sites. Social listening tracks brand sentiment – again, alerting to any issues, however early stage – and monitors reach. Finally, real-time updates across publishers ensure there are no marketing errors, preventing issues before they occur.

Ultimately, with consumers increasingly turning to trusted third parties to discover, understand and seek recommendations and reviews regarding new financial offerings, it is crucial that financial brands have a strong presence on these sites. But what is even more crucial for financial advertisers – mission critical, even – is selecting the right affiliate network. Doing so will give them the confidence that they’re reaching and engaging new groups of consumers while maintaining compliance with financial services sector regulations. Protection of consumers and brands is the ultimate win-win.

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