One perennial challenge facing chief marketing officers at financial institutions is convincing their chief financial officers to invest in the right marketing strategy and tactics. But in most cases, it’s a challenge that must be faced: Unless the CMO effectively markets their strategy to the CFO, they might not get the opportunity to market to their customers at all.
A July 2024 survey of banks and credit unions highlights the disconnect. Provided by financial services marketing firm Vericast, the survey revealed that nearly three-quarters of financial institutions experience communications challenges between marketing and budget teams. Just over half of respondents agreed with the statement that their CMO and CFO were “mostly aligned… but some differences exist.” A mere 28% claim to have marketing and finance teams that are fully aligned.
While the challenge may seem obvious, the solution is less so. Marketing effectively to a CFO starts with understanding their requirements and pain points—not just in best-practice terms but with respect to current economic and market conditions, too.
The economy is high on the CFO’s priority list and tends to make it harder to win support for innovative marketing approaches. According to Deloitte’s second quarter 2024 CFO Signals survey, CFOs are concerned about how inflation, interest rates and geopolitics could impact business conditions, leaving about two thirds believing this may not be a good time to take risks. (On balance, the survey suggested CFOs would be responsive to spending related to talent retention as well as projects related to incorporating artificial intelligence and other technology upgrades to increase efficiency.)
Financial institution CMOs are facing an especially tough environment. On the demand side, many American consumers are avoiding taking on new debt because of high interest rates. Indeed, the Federal Reserve Bank of New York reports that one-in-five U.S. cardholders are “maxed out,” on their credit cards, using at least 90% of their credit limit. At the same time, competition is unrelenting, as digital-first newcomers are investing heavily in customer acquisition.
A Scary Thought:
One in five American cardholders are 'maxed out' on credit cards.
And marketing budgets are already tight: Vericast’s survey finds that 52% of respondents plan to spend 0-5% of total 2025 revenues on marketing and 31% plan to spend 6-10%. But experts say that, depending on their size, stage of growth and strategy, Financial institutions should set aside about 10% of revenues for marketing. Meanwhile, 46% of financial institutions responding to Vericast’s survey said that their 2025 marketing budgets will remain flat or decrease compared to 2024.
To better understand the way forward for CMOs working in financial services, The Financial Brand spoke with two Vericast executives, Senior Vice President FI Marketing Products & Strategy Lisa Nicholas and Vice President FI Client Strategy Sharon Cook. They helped unpack recent survey data, and provided some guidelines not just to bring CFOs into the “yes” column but to make them marketing believers.
Find Common Ground in the Balance Sheet
The balance sheet is a financial institution CFO’s home turf, and marketers who start there gain immediate credibility. The idea is to facilitate a discussion that compares the CMO’s and the CFO’s respective views on this critical management report.
For CMOs, balance sheet insights should drive and validate their recommendations to sell certain products and services (whether driven by interest-rate spreads or fees) and in what proportion. Fluency in key KPIs – efficiency ratio, cost-to-income, net interest margin, return on equity – and the ability to connect them back to strategy is critical.
Vericast’s Cook urged CMOs to be proactive rather than reactive. “The most effective CMOs understand the balance sheet needs and are making recommendations to the CFO based on that reality and those metrics rather than waiting to be told,” she said.
Articulate the Power of ‘Always-On’ + ‘Product Activation’
According to Vericast’s survey, financial institutions’ top three choices in terms of both priorities and budgets are brand awareness, growing deposits and improving customer/member experience. However, while brand awareness ranks third as a marketing priority, it jumps to No. 1 as a budget item for 2025. Against this backdrop, a CFO – mindful that tracking brand advertising effectiveness can be difficult – might be inclined to see brand awareness as “nice to have” but not “need to have.”
But Nicholas cautioned against seeing brand awareness as a “soft” goal in competition with a “hard” objective like deposit growth. In Vericast’s experience, she said, the most efficient marketing strategies balance an always-on effort to maintain brand awareness with the immediate demands of product activation.
“Other clients tell us they don’t have to make such expensive promotional offers because they’ve spent time and invested in making their brand resonate.”
— Lisa Nicholas, Vericast
A consistent branding effort boosts loyalty, making it easier – and less expensive – to ramp up product activation when it’s needed. It also makes it less likely that an FI will have to offer lavish incentives (e.g., $500 for a new checking account) to chase hot money.
“There’s a lot of money that’s wasted,” Nicholas said. “Other clients tell us they don’t have to make such expensive promotional offers because they’ve spent time and invested in making their brand resonate.”
Why It’s Critical to Know Your KPIs
In addition to engaging the CFO in a deep dive on balance sheet data, CMOs need to bring their own data to bear. With budgets tight, Cook said, backing up your marketing plan with performance data is vital to winning over a CFO. “When you’re rushing out to market, not being thoughtful and not strategically identifying the right markets, with the right products, you’re potentially wasting valuable financial resources.”
By using precise data and KPIs, CMOs can demonstrate return on marketing investment at a more granular level to better resonate with the CFO and better support their marketing efforts and budget needs.
Interestingly, not all survey respondents were ready for such rigor. The survey asked how a CMO should best collaborate with a CFO to secure a larger marketing budget. A majority (57%) said, “Develop a comprehensive marketing strategy that aligns with the institution’s overall financial goals, highlighting how increased marketing spend can drive revenue growth and profitability.” But only 23% of respondents pushed for establishing “a clear, measurable set of KPIs for marketing activities, and … a plan to regularly review and report these metrics to the CFO to ensure transparency and accountability.”
Don’t Be Afraid to Push Back
Remember that communication is a two-way street, Nicholas said. When appropriate, question priorities and push for clarity on the reasons behind any given strategy. CMOs should speak out if they see a disconnect between the ambitiousness of a strategy and the budget being allocated. For example, if a CFO or other senior executive has requested a marketing campaign to acquire new deposits, auto loans or mortgages, ensure the data shows strong demand for these products in the institution’s catchment area.
“Marketing teams must look at metrics about market share and product penetration – where is your brand resonating or not resonating – before setting off on an expensive promotional campaign,” Nicholas said. If the plan being pushed by top executives does not stack up with the marketing data, CMOs should push back, suggesting alternatives that can meet the CFO’s goals.