Marketing is a crucial aspect of any business but, for those in the consumer finance industry, it also comes with various regulations and compliance requirements. Adhering to these rules may seem like a challenge, but marketing compliance—particularly when done with technology—has the potential to give financial institutions a major advantage over their competitors by prioritizing both compliance and consumer protection.
This approach can be especially beneficial for organizations looking to stay ahead of the curve and maintain a strong, trustworthy reputation in the eyes of their clients and regulatory institutions alike.
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Here are 7 ways marketing compliance can be used as a competitive advantage for consumer finance companies.
There are two ways to improve your bottom line: increase revenues or decrease costs. Increasing revenue requires significant effort and dedication. However, reducing costs through optimization and streamlining operations can be a more straightforward approach to improving your bottom line and accelerating growth. This way, you can achieve your goals without negatively affecting the overall functioning of your business.
In short, having a solid compliance program in place allows your organization to move faster and offer more products and services while mitigating risk, thus accelerating growth.
Minimize risk for successful partnerships
Consumer finance companies form partnerships and relationships with other businesses, affiliates, and third-party entities to reach a wider audience and increase their revenue. By working together, these entities can leverage each other’s strengths and resources to offer more attractive and comprehensive products and services to customers. For example, a consumer finance company may partner with a retailer to offer financing options to customers or with a fintech company to offer innovative digital solutions.
However, this approach comes with its own set of risks. One of the primary concerns that companies face is the fact that they are no longer in control of the marketing message that is being communicated to the consumer. When working with affiliates, partners, and other third parties, there is always a risk that the brand image of the consumer finance company may be negatively impacted by the marketing tactics used by these entities.
Solutions like PerformLine offer a comprehensive solution for the automatic monitoring of partners and affiliates for marketing compliance, using a combination of web, email, and social media monitoring. Using PerformLine, you can ensure that all of your partners are adhering to established standards, helping you to avoid potential legal and reputational risks.
Free up time and resources for other strategic initiatives
When a company has clear marketing compliance guidelines and an automated marketing compliance solution to monitor its marketing activities across channels, it can more easily plan and execute campaigns without the need for extensive review or approval processes.
By streamlining its marketing processes this way, a company can be more efficient and effective in its marketing efforts, freeing up valuable time and resources that might otherwise be spent on manual and tedious compliance-related activities.
By removing the need for manual compliance review and monitoring, organizations can focus on other strategic initiatives, such as developing new products, expanding into new markets, or improving customer service, and better positioning them to achieve long-term goals and increase speed-to-market.
Marketing compliance technology can save your marketing staff time by streamlining onboarding, centralizing document collection, discovering compliance issues, automating follow-ups, and executing real-time compliance checks.
Retain top compliance talent
Top compliance talent is hard to come by—80% of compliance managers believe it is difficult to recruit compliance professionals, but what’s even more difficult is to engage and retain top compliance talent. This is where companies can leverage marketing compliance to their advantage.
By maintaining a strong culture of marketing compliance, an organization can attract and retain top compliance talent because it exhibits a commitment to ethical behavior and compliance with the law. This can be important for seasoned compliance professionals, who often place a high value on working for companies that prioritize compliance and have a solid track record of following the necessary rules.
To retain a team of highly-experienced compliance professionals, it’s crucial to avoid burdening them with tedious, manual tasks that can be automated. By using advanced technology like PerformLine, your compliance team can focus their efforts on more strategic activities, such as collaborating with other departments to identify potential risks and develop effective risk management strategies.
Automation lets compliance staff spend more time on higher-level responsibilities like monitoring emerging regulations. This not only allows for more efficient use of resources but also provides the opportunity for the compliance team to take a proactive approach to risk management and compliance, rather than being stuck in reactive mode.
Protect brand reputation
Fees and fines can cost a company a significant amount of money if its marketing materials are found to be non-compliant. For example, since its creation, the Consumer Financial Protection Bureau (CFPB) has taken 302 public enforcement actions, totaling $13.5 billion in fines and penalties. This number shows that regulators are taking a more rigid approach to ensure that financial institutions follow the rules and that those who break the law are held accountable for their actions.
Yet, the true cost of non-compliance extends far beyond simple fines. Reputational damage and business disruption are the highest costs for non-compliance. Interestingly, companies face the possibility of losing 22% of their potential business if a negative comment or article appears on the first page of search results for the company.
Marketing compliance rules and regulations are put in place to protect the interests of customers. Therefore, marketing compliance violations, like making unfair or deceptive claims or promises, turn customers away because they indicate a lack of transparency and trustworthiness in the company’s marketing and advertising efforts. By respecting these regulations and prioritizing marketing compliance, a company demonstrates that it’s also committed to prioritizing consumer protection.
Make data-driven partner decisions
Effective vendor oversight is essential for minimizing risk and guaranteeing services are provided on schedule and to high standards.
With the rise of digital marketing channels, consumer finance companies need to be vigilant in complying with advertising and marketing regulations and guidelines issued by regulatory bodies like the CFPB and FTC. A marketing compliance monitoring technology allows organizations to get complete visibility into the compliance activities of their partners with detailed reports and analyses. This data provides valuable insights into third parties’ compliance performance, allowing you to risk-rank them and identify areas that need improvement.
In short, marketing compliance helps organizations make strategic, data-driven decisions by using data as the primary basis for selecting or terminating partnerships while ensuring that the partners comply with relevant regulations and standards.
Position yourself as an ideal partner
Marketing compliance is known to yield more business opportunities. Having a strong reputation for marketing compliance attracts investors and other businesses-seeking partnerships because companies that comply with laws and regulations are perceived as trustworthy and reliable. This is especially important in industries where there is a high level of regulatory oversight, such as consumer finance.
Customers and partners are more likely to do business with a company they trust to operate ethically and transparently. Potential partners or investors may be hesitant to work with a company that has a history of non-compliance, as it could put their own reputation at risk.
On the other hand, a company that complies with regulations will likely be more stable in the long run. This can appeal to investors and other businesses, as they can feel confident that the company will continue to operate legally. Matthew Bowers, the General Counsel at Rayliant Global Advisors, stated that companies that have well-established compliance infrastructures tend to perform better in terms of investment outcomes.
Organizations should make their commitment to compliance clear to customers, vendors, investors, and other stakeholders. One practical approach can be to include compliance language in your company’s mission statement and values. Another effective approach is to communicate compliance policies and procedures to all employees and ensure they are trained on them. If you wish to go even further, consider incorporating compliance-related KPIs into your company’s performance indicators and make them accessible to everybody.
The role of technology in marketing compliance
Technology streamlines and automates processes to ensure that all marketing materials are within the bounds of regulations and laws. With limited bandwidth and an increasing amount of content to review, compliance teams may only be able to spot-check for compliance via manual reviews, resulting in missed issues and a greater chance of not meeting regulatory standards.
Automation of compliance processes is crucial for modern organizations as it helps to streamline the compliance process and ensure that all relevant regulations and standards are met. This can significantly reduce the chances of human error, which is a major contributor to non-compliant content going live.
Real-time monitoring of compliance is also essential, as it provides companies with the ability to quickly identify and address any potential compliance issues before they escalate. This not only helps to protect the company from legal repercussions but also ensures that the company maintains a strong reputation for compliance and ethical behavior.
In short, technology helps alleviate the burden of marketing compliance, allowing marketers to focus on creating compelling campaigns while ensuring regulatory compliance at the same time.
Both marketing compliance review and monitoring can be automated through a compliance platform, like PerformLine’s omni-channel compliance platform.
With PerformLine, organizations in highly-regulated industries like mortgage, BNPL, fintech, and partner banks can streamline the compliance review and approval process of marketing materials before they’re published and can automate and scale the ongoing compliance monitoring of content once it’s published.
The platform covers all major marketing and sales channels for regulatory and brand compliance within one single platform—eliminating the need for multiple-point solutions and manual review.
Make marketing compliance your competitive advantage with PerformLine
Traditional approaches to compliance management, which are typically manual, are no longer effective. It necessitates the need for organizations to turn to technology-based solutions to automate the marketing compliance management process. Luckily, the process of marketing compliance is becoming more efficient through the use of scalable technology like PerformLine.
If you would like to learn more about monitoring your marketing channels for compliance with one centralized platform, request a demo today.