Financial services firms face a constant battle to win consumer trust. Severely tarnished by the 2008 financial crisis, the whole sector has been criticized for the actions of a few firms, which put financial gains above the interests of customers and society. New regulation, ESG strategies, and thought-leadership marketing programmes have helped FinServ to rebuild its reputation, but it can never be taken for granted, as a recent decline in consumer trust, sparked by the pandemic, shows.
Consumers today arguably have more power than ever, with social media providing a platform to demand change. The role of capitalism – the good and the bad – has come into question, and for FinServ, that means consumers are looking for brands to show that they stand for more than just making money.
The Power of Purpose
Demonstrating a purpose beyond profits is vital to winning the battle for customer trust and loyalty in today’s FinServ sector. Research shows that two thirds of consumers (67%) are now belief driven buyers, and 64% will boycott a brand solely because of its position on a social or political issue. On the flipside, 50% of consumers say that banks that actively support community, transparency and societal good are more likely to win their business.
Today’s consumers want brands to have a clear and authentic purpose, which threads through everything they do, including how they make money for their customers and shareholders. And they don’t want to sacrifice financial returns as a result.
“Investors, customers and high-net-worth (HNW) individuals value ethics and financial returns,” said Ioana Erhan, Director, Financial Services Vertical, EMEA and LATAM, LinkedIn. “They don’t care how you do it, as long as you do it. They demand more from you as a brand.”
For FinServ firms, such as the asset management firm BlackRock, that means finding a way to combine profits with doing good.
“We’ve recognised that any societal objective, purpose or drive that is too peripheral to the core business, will struggle to gain traction alongside the pressures of commercial reality,” explained Nicholas Wright, Chief Marketing Officer, EMEA at BlackRock. “So, aligning your values with your ability to make an impact within society, but also commercially, is so important.”
Finding Your ‘Why’
So, while ESG (Environmental, Social, and Governance) is clearly sparking some important conversations and content in FinServ, finding a meaningful and authentic purpose means going beyond headline-grabbing topics such as climate change, inequality, or racial justice. In fact, analysis on LinkedIn found that ESG is one of the most difficult areas to become a thought leader, due to excessive noise in the space; in the first quarter of 2021, there were more than 50,000 FinServ posts about ESG on LinkedIn (source: internal LinkedIn analysis). Jumping on hot topics can come across as inauthentic if it doesn’t form part of a wider marketing strategy.
“It’s really easy in marketing to just plan around tent-pole moments, such as Black History Month, or Pride month,” said Megan Farmer, Executive Director, Head of Social Media at JP Morgan. “But catering to a different audience every month is actually more divisive than inclusive. So, part of our always-on strategy is showing the diversity that we have in the company in our marketing materials, all of the time.”
Purpose should draw on an organisation’s people, culture, and how it can best add value to customers and society, on a consistent basis. For example, as we emerge from the pandemic, financial wellbeing is one area where FinServ can take the lead, with research showing that 46% of consumers are concerned about their finances. This is a topic that asset management firm, BlackRock, has put front and centre.
“The BlackRock purpose is to help more and more people experience financial wellbeing. So, it is clearly inclusive but also aligned with the firm’s engrained motivation to deliver commercial return,” Wright said. “And I don’t think we should be ashamed of that – it gives Marketing the power to weave purpose into the DNA of the firm.”
Opportunity Through Purpose
By putting purpose at the core of a brand and business – rather than treating it as an add-on – firms will find that they don’t just win customer trust, and do good for society, but also create value for the business and drive growth. Research has shown that purpose is one of the key drivers of innovation in high-growth companies, through its role in sparking new ideas and revenue streams. This is something that JP Morgan has already started to see through its focus on diversity.
“We made a $30bn investment in underserved black communities that have a vast opportunity to create wealth, contribute to the economy, but also to invest their money,” Farmer explained. “That programme is driven not only because it’s the right thing to do, which it is, but at the end of the day it’s also helping businesses, the economy and JP Morgan.”
And that is the essence of purpose in today’s FinServ world. It isn’t about sacrificing performance for purpose – but driving performance through purpose.
To read more about how marketers can bring fresh thinking to FinServ, check out our guide to Marketing Without Compromise. Also, subscribe to the LinkedIn Marketing Solutions blog to keep up with the latest trends in FinServ marketing.