A new marketing report commissioned by Fintel Connect finds that system limitations hinder financial institutions’ abilities to measure the effectiveness of their marketing spending. The Marketing ROI Gap in Banking: How Financial Institutions Spend, Measure, and (Struggle to) Prove Marketing’s Value was completed by Cornerstone Advisors.
Social media and technology provide financial institutions with more options today, but how do they measure ROI?
Many are caught as they are supposed to provide measurable results while relying on incompatible infrastructure, systems designed for operations, not modern attribution.
“Nearly 6 in 10 of the senior executives we surveyed said their core or CRM system limits their ability to measure ROI,” the report states. “A third believe they are crediting the wrong source more than a quarter of the time (and 28% aren’t even sure). And not one of the institutions surveyed said they could reliably attribute results to all the outcome measures we asked about.”
The problem often begins with budgeting. More than half of institutions set their current budget by adjusting the previous year’s budget instead of considering expected returns. That made more sense when marketing channels were stable, and brand advertising was the focus.
Things change too quickly today. That old approach fosters overinvestment in legacy channels, to the detriment of those which are easier to measure and optimize.
Roughly 54% of banks and 80% of credit unions invest in at least six marketing channels. The most popular ones are:
- Email 85%
- Branch/in-person 83%
- Display/programmatic 78%
- Paid social 77%
- Paid search 73%
- Organic search/AI-driven discovery 71%
There’s a disconnect on where institutions spend and where they get the best results. While email gets the ninth-largest share at 12%, 48% of respondents said it gets the best ROI.
CMOs also say that if they got larger budgets, they’d spend more on organic search, paid search, and affiliate marketing. One-third invest in affiliate marketing, yet 20% said it’s the most under-leveraged tool.
“The channel’s relative weakness is scalability,” the report states. “This likely reflects the relationship-intensive nature of building affiliate partnerships, which requires upfront investment in identifying, vetting, and activating partners before results materialize. Meanwhile, institutions pour money into paid search—a channel where big spenders like megabanks and fintechs will simply outbid them.
“The competitive logic here is backward. Affiliate/partner marketing is one of the few channels where a community institution’s local relationships and trust constitute a structural advantage. Chasing paid search is a game community banks and credit unions can’t win.”
To become more effective, marketing departments must own the growth strategy, become data leaders, and develop a core competency.