Chief marketing officers have gotten used to living — and working — through rapid change. From the emergence of generative AI technologies like ChatGPT and Gemini, to President Joe Biden’s unprecedented exit from the presidential race, CMOs at banks and credit unions are facing a lot of uncertainty heading into the second half of 2024 and into 2025.
The rapid pace of change is also familiar to most Americans, yet CMOs face an added challenge. They must develop marketing messaging for financial institutions that will resonate during a time when inflation rates are rising and customers are struggling to afford basic necessities like housing.
“All banks are really concerned about housing; about affordable housing and helping our customers as they’re trying to navigate this interest rate market,” says Teri Williams, president and chief operating officer of OneUnited Bank, the nation’s largest Black-owned bank. “There really is an opportunity and a challenge to help our customers navigate this housing market, because it’s really tough. Especially for first time homebuyers.”
One thing is for certain: CMOs have a lot on their mind right now. The Financial Brand asked marketing leaders from financial institutions across the United States about their biggest concerns for the remainder of 2024 and looking to the new year. Some common themes emerged: including a focus on adding new technologies, tightening budgets, and finding ways to engage new customers of all generations. Here’s what they said.
Budgets Are Shrinking
CMOs are shifting around their marketing dollars to focus more on digital, personalized strategies. But they are increasingly having to be picky about where to invest their limited funds. In 2024, marketing budgets reached pandemic level lows, according to Gartner data. Budgets plummeted to just 7.7% of companies total revenue, down from 9.1% in 2023, Gartner found.
Looking to 2025, many marketing executives are expecting either tighter budgets, or roughly the same budget as 2024. The upcoming election will also have some impact on budgets for next year, says Josh Fleming, vice president of marketing for Bank Iowa.
“I think people are a little timid about increasing marketing spend right now when we don’t know who our leader is going to be. I expect to be flat,” he says.
Marketers also aren’t expecting to be doing a lot of hiring, at least in the near future. While there is a lot of good marketing talent available, marketing teams are opting to work with creative services agencies or creative as a service companies, says Diana La Point, senior vice president, CMO, of First U.S. Community Credit Union in Sacramento, California.
“I recently made a switch from a large credit union to a smaller one, where I went from having a team of 17 to about three, which is a big difference,” La Point says. “Being able to use partial time of experts through agencies that provide contractors to work on a very specific expertise has been invaluable to me in doing many of the things that I used to be able to do with a larger team.”
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Digital Transformation Remains a Key Focus
Marketing technologies are getting smarter — and it’s becoming more important for marketing teams to invest in technologies to keep up with a fast paced media cycle. Artificial intelligence and other new technologies continue to be top of mind for bank marketers, who are increasingly seeking ways to do more with less. Most marketing teams are comfortable with new technology, and are ready to make bigger investments in these tools.
“In many ways it’ll make our jobs easier, including the generation of content and even brainstorming ideas for a project,” says Nichole Kladder, first vice president, CMO of Mercantile Bank of Michigan. “AI is fast and easy, and it’s getting better by the day. Just this week my team leveraged ChatGPT when generating a top 10 list for google search words for a targeted digital campaign. It ultimately wasn’t the list we ended with, but it was a starting point and it completely sped up our process.”
Yet, money is a concern. Updating a technology stack can be a hefty investment and CFOs may be more inclined to spend money on customer facing technology, rather than a marketing tool.
“The biggest priority is striking the right balance between immediate profitability and strategic investment in technology,” said Michael Daum, chief marketing officer at Golden 1 Credit Union in Sacramento, California. “CMOs today cannot afford to call a timeout from short-term balance sheet obligations to solely shift focus to building out your marketing technology stack — it requires a holistic approach, integrating these elements into everyday operations.”
Connecting with the Younger Generations Remains a Challenge
Bank marketers are increasingly focused on finding new ways to reach younger generations, like millennials and Gen Zers, through marketing.
One of the top ways that banks try to reach younger clients is through social media. But banks face increased regulatory scrutiny when it comes to promoting products and services on social media. Compared with fintechs, banks may have a more difficult time getting creative on social channels, Williams says.
“Banks attempted to be a little more exciting with their marketing,” Williams says. “I think what we have collectively learned is that maintaining the trust of our customers is more important than being exciting. It’s crucial to be trusted and transparent.”
Bankers are also exploring a variety of other strategies to connect with Gen Zers. LaPoint has been connecting with Gen Zers locally in Sacramento by attending community college fairs and providing digital resources for students. The bank has also been revisiting its marketing language to make sure it’s Gen Z friendly.
“This idea of a checking account can be seen as a ‘spending account.’ Really meeting them where they’re at,” she says.
Having a good relationship with the compliance team can be helpful when exploring new or innovative marketing strategies, Fleming says. For example, the marketing team at Bank Iowa developed a children’s book to teach youngsters about savings accounts.
“Marketers being on the same page as the compliance director has been a good recipe for us at the bank,” he says. “How can we make sure compliance is onboard ahead of time to make sure we navigate those waters a little easier.”
Whatever strategies banks decide to employ, Daum advises that it’s important to lean on colleagues for support. “Don’t be afraid to seek clarity from industry peers and share your experiences with others. Collaborative environments can lead to innovative solutions,” he says. “I have found this collaboration to be one of the most refreshing aspects of the credit union community.”