Marketing a community bank has never been simply about promoting checking accounts, mortgage rates, or promotional CD rates. But, it does seem to get more complicated every day, doesn’t it? I mean, today's bank marketers have to navigate a stormy sea of privacy expectations, artificial intelligence issues, fraud prevention challenges, and burdensome agency regulations. All, of course, which influence a community bank’s ability to market their products and services.
Many of the latest regulatory and legislative developments are aimed at compliance. These developments present both opportunities and challenges for marketing departments. On the “opportunity” side, marketers will strengthen customer trust and differentiate their institutions. On the “challenge” side, marketers could see that customer trust erode and their customers go elsewhere.
Here are a few developments community bank marketers should be watching in crafting their marketing messaging.
Fair lending rules
Recent changes to Regulation B under the Equal Credit Opportunity Act (ECOA) have narrowed certain interpretations of what constitutes "discouragement" in lending advertising. While this may provide banks with somewhat greater flexibility in how they target marketing campaigns, it does not eliminate fair lending responsibilities.
As they develop their messaging, community bank marketers must ensure they are welcoming and inclusive to all qualified applicants. Compliance and marketing teams should remain close partners, especially as personalized marketing becomes more sophisticated.
Open banking
Section 1033 of the Dodd-Frank Act, and the implementation of the Consumer Financial Protection Bureau's Personal Financial Data Rights Rule, mark another step toward the acceleration of open banking.
- It outlaws "screen scraping": Before this rule, third-party apps usually gathered customer data via screen scraping. The rule forces financial institutions to build and maintain secure, developer-friendly APIs. Apps can request data securely using decentralized digital tokens.
- It mandates free data access: The rule establishes that financial data belongs to the consumer, not the bank. It requires banks to make covered data available electronically for free upon a consumer's request.
- It enforces data standardization: The rule requires data providers to format data uniformly. Under the scope of the rule, banks must reliably export 24 months of transaction histories, account balances, upcoming bill schedules, and basic contact info in a clean, universal electronic form.
- It establishes strict consumer privacy safeguards: The rule implements strict "purpose limitation" requirements. Third-party apps are prohibited from collecting or keeping customer data for anything other than the specific service requested.
With consumers gaining greater control over sharing their financial data with third-party applications and financial service providers, customer experience becomes an even more important differentiator for community banks. As attracting and retaining customers depends less on convenience and more on trust, service, and meaningful relationships, community bank marketers must leverage their personalized service, local decision-making, and long-term relationships.
Privacy
New state privacy laws continue to expand consumer rights regarding personal information, targeted advertising, and data collection. Although financial institutions already comply with the Gramm-Leach-Bliley Act, these evolving state requirements reinforce the importance of transparency.
At a time when consumers are increasingly concerned about data security, bank marketers should view privacy not merely as a compliance obligation but as a brand promise, distributing messaging that explains why certain information is collected, how it is protected, and how it benefits the customer.
AI acceleration
Artificial intelligence is transforming content creation, campaign management, personalization, and customer communications. True, it allows teams to spend less time creating routine content and more time focusing on strategy, creativity, and customer engagement. But, there are brand reputation and compliance issues here. Regulators continue emphasizing that financial institutions remain responsible for the accuracy and fairness of every message, regardless of whether AI helped create it. From the ABA Banking Journal:
“Speaking at a symposium on responsible AI use hosted by the National Fair Housing Alliance, officials from the Federal Reserve, FDIC, the Office of the Comptroller of the Currency and the Consumer Financial Protection Bureau stressed that banks are ultimately responsible for how the technology is deployed, even if they are contracting with third parties to provide AI-powered products and services.”
And, as we all know, AI-generated content can often be less than accurate. Community banks must have in place the internal governance around AI-generated marketing content that ensures accuracy and compliance. Every advertisement, social media post, email campaign, and website update should receive appropriate human review before publication.
Looking Ahead
The partnership between a bank’s marketing and compliance functions will continue to grow in importance as regulatory changes surrounding privacy, data sharing, AI, and consumer protection reshape how banks communicate with their audiences.
Customers have more choices than ever before. They can compare rates online, open accounts from their smartphones, and move money with a few taps. What they cannot easily replicate is confidence in an institution tasked with guiding them on their life’s financial journey. For community banks, capitalizing on that confidence in their marketing may prove to be their most valuable product of all.
Bank Marketing Center
We’re Bank Marketing Center, the leading, subscription-based provider of automated marketing services to community banks. Our goal is to help bank marketers with topical, compelling communication with customers that builds trust, relationships, and revenue. And we do this through automating critical bank marketing functions, such as content creation, social media management, digital asset management and, of course, content routing. All of which contribute to a community bank’s ability to create and distribute content that drives business, without fear of fines, brand damage, or fleeing customers.
We also want to share what we know—and learn along the way—with all our community banking friends. Whether it’s content focused on the latest on AI technology, suggestions on how to attract and retain top talent, or the importance of data protection, we’re here to make bank marketing the best that it can be.
Want to learn more about what we can do for your community bank and your marketing efforts? You can start by visiting bankmarketingcenter.com. Then, feel free to contact me directly by phone at 678-528-6688 or via email at nreynolds@bankmarketingcenter.com. As always, I welcome your thoughts.