Marketing presents a distinct combination of opportunities and difficulties for the financial services sector in today’s digitally driven environment. The digital trends range from digital brand building and performance-based campaigns to social media handles that are being channelized by different segments of the BFSI sector. Data analytics, big data and hyper-personalization are catching trends, based on today’s consumer behaviour.
Banks are following digital consumers, during the initial year of the pandemic, there was a significant surge in new mobile banking registrations, peaking by mid-April at a staggering 207 percent above the daily average. This spike reflects the profound shift towards digital banking amongst consumers in response to the pandemic’s impact. With increased integration of tech and digital into today’s BFSI marketing, there is an increased need for an organized industry regulated approach, so that data is safe and there is no cyber break in the industry at any given point. Important regulations like GDPR, CCPA, and ASCI are significant in today’s marketing initiatives.
Below are some industrial guidelines which the marketers in BFSI industry need to abide by:
GDPR Compliance: The European Union’s General Data Protection Regulation (GDPR) is one of the most important data privacy laws in the world. With harsh penalties for non-compliance, GDPR establishes tight guidelines for gathering, using, and storing of personal data. GDPR compliance is a must for BFSI companies that serve or operate in the EU.
GDPR mandates that BFSI marketers get consumers’ express consent before collecting their personal data for marketing purposes in the context of digital marketing. This covers permission for targeted advertising, email subscriptions, and cookies. BFSI companies also have to guarantee the privacy and security of client data and give people the ability to access, update, or remove their data at any time. Adhering to this compliance is crucial in today’s competitive BFSI industry.
Cyber Crime Compliance: Legal Issues: In India, the legal framework for combating cybercrimes and financial malfeasance is protected by important legislations such as the IT Act of 2000 and the IPC Act of 1860. Complementing these cornerstones are several other laws aimed at preventing financial crimes. These include the RBI Act of 1934, the Forex Management Act of 1999, the Banking Regulation Act of 1949, the Indian Evidence Act of 1872, the Contract Act of 1872, the Negotiable Instruments Act of 1881, and the SARFAESI Act of 2002. Together, these statutes form a robust legal security to safeguard against various forms of financial misconduct and cyber threats.
CCPA and ASCI mandates: The Department of Consumer Affairs (DoCA) and Central Consumer Protection Authority (CCPA) have joined hands to protect the consumer rights, in terms of issuing advertisements. The collaboration will help consumers in the advertising landscape, specially with respect to digital advertising and it will promote transparency and fairness to consumers. Digital advertising is facing new challenges, due to the fast paced growth and developments within the BFSI industry and this collaborative approach will help digital marketers implement transparent practices.
Fair Practices Code: Marketers operating within the financial sector are obligated to adhere to the Fair Practices Code, which delineates fundamental principles governing their interactions with customers. It serves as a guiding framework, ensuring ethical conduct and fair treatment towards all clientele.
Most importantly, it is important to be transparent in marketing communications by outlining data gathering procedures, privacy guidelines, and customer rights in detail.
Regulatory bodies like AMFI, SEBI, IRDAI are making sure that in the race of digital growth, the interests of consumers are protected. Non-compliance with financial marketing regulations can lead to various risks like Legal and regulatory risks, reputational risks, financial risks, operational risks and it can also impact the strategic direction of financial institutions. While marketing in BFSI is gaining ground, consistent growth in the industry can only happen when companies and marketers adhere to the compliance rules and regulations.