Rise of ‘Commerce Media’ in Banking Offers Revenue… and Challenges
More financial providers want to join the likes of JPMorgan Chase, PayPal and Revolut in putting targeted marketing into their digital channels. Attention to compliance and technology are essential.
By Cornelia Reitinger, Head of Advertising Business Development at SAS
Retail media has experienced significant growth and attention in recent years due to retail industry giants capitalizing on high-quality first-party data and its strong revenue potential. Now, retail media has started expanding its influence into the financial services sector.
Retail media — often referred to as commerce media in banking — is an approach by which banks and other financial providers can use their high-quality customer data, digital platforms and partnerships to deliver targeted sponsored messaging.
This strategy transforms traditional loss-leading channels, like transaction accounts, into monetizable spaces for both in-house and third-party offers by creating a new revenue stream. By applying customer insights, banks can natively offer relevant, personalized content and promotions directly within their own controlled ecosystem, enhancing customer engagement and driving additional revenue.
Retail media enables financial providers to deliver highly targeted and personalized offers to consumers across their digital platforms, including mobile apps and websites but also digital screens in branches and ATMs. This can create a mutually beneficial outcome by not only generating new revenue streams but also delivering a personalized service that customers have come to expect.
By adopting first-party ad servers to deliver paid third-party sponsored offers, banks are now using this technology for their own marketing campaigns as well. With ad servers, banks can promote their own in-house products, such as credit cards, loans or investment products, targeted to a much more precise audience than traditional digital marketing platforms allow.
The ability to control both types of ads and personalization with a first-party ad server gives providers a unique opportunity to enhance the customer experience while driving both internal and external revenue.
Initial Challenges in Adopting Retail Media in Banking
In 2024, Chase Bank and Revolut, and later PayPal, made headlines by announcing their plans for retail media, signaling a significant twist in the financial services industry’s approach to customer engagement and revenue generation. SAS has initiated numerous conversations with banks that recognize the immense value of retail media and are now laying the groundwork to integrate it into their strategies. We expect to see more banks unveiling their retail media strategies during 2025.
The path to success for financial institutions adopting retail media is not as straightforward as it is for the retail industry. Traditionally, banks have been conservative in adopting new technologies, particularly those involving customer data. Banks working to adopt retail media run into several challenges:
• Data privacy and security. These are two primary concerns. Banks are held to much higher standards of data protection than are retail or media companies. Banks hold sensitive customer information, and any misuse or breach can lead to significant financial losses, penalties, legal issues and reputational damage.
• Regulatory compliance. Banks also face the challenge of adopting advertising platforms that can provide personalized experiences without violating regulatory standards around the globe. These include, for example, regional regulations such as the California Consumer Privacy Act, the European Union’s General Data Protection Regulation, Brazil’s General Personal Data Protection Law, and Japan’s Act on the Protection of Personal Information.
• Technical integration. The technical complexity of integrating an adtech platform into banking systems poses another challenge. Banks require a flexible solution that seamlessly optimizes their marketing and advertising campaigns, but also integrates into their existing technology stack, supporting additional security layers.
• Skills expansion. A less obvious, but nonetheless crucial, challenge is finding staff with commercial expertise in retail media. This requires a different skill set than for selling financial services. It demands understanding of both advertising strategies and how to use first-party data for highly targeted campaigns. Partnering with consultants or other experienced outside parties can help. They can assist in setting up an in-house retail media team or offer the option to outsource these functions.
• Cultural resistance to change. A shift in perception regarding the role of advertising in these spaces is essential among banks and their stakeholders. Over the years, advertising has long been perceived as intrusive, largely due to the overexposure in traditional digital media channels. However, by applying native advertising — which blends seamlessly into the regular customer experience — creative advertising placements transition from being a disruptive element into an engaging feature, creating a personalized experience that supports customer engagement.
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Balancing Flexibility with Security Using Adtech Tools
Financial institutions looking to venture into retail media need to carefully evaluate the technology partners available. The ideal platform must offer more than just advertising capabilities. It should provide a comprehensive solution that aligns with the bank’s security requirements, regulatory obligations and customer trust:
• Flexibility through APIs: Choosing an adtech platform with robust application programming interfaces enables banks to customize their retail media efforts without overhauling their entire infrastructure.
• Combining first-party and third-party offers: A first-party ad server allows banks to combine highly personalized marketing for their own products with sponsored offers from approved third-party partners. For example, a bank can offer a customer a personalized mortgage rate while also serving an ad from a third-party travel company offering discounts on holidays, all based on the customer’s recent spending or saving patterns. This blend of in-house and third-party offers strengthens the bank’s ability to engage customers and create a more tailored, valuable experience.
• Security layers for data protection: The most critical factor for banks in adopting retail media is ensuring the security of their customers’ data. Leading adtech platforms now offer advanced security features such as encryption, tokenization and secure data-sharing mechanisms to protect first-party data and comply with global data privacy regulations, allowing banks to operate within the legal framework while still delivering personalized ads.
• Consent management: Banks must ensure that they are not only protecting customer data but also giving their customer full control over how their data is used. Adtech platforms that offer consent management tools make it easy for banks to obtain and track customer permissions, further building trust and transparency with their clients.
Read more: Think Beyond the Clicks: Bank & Credit Union Marketing Demands Holistic KPI Analysis
Note that adopting ad servers isn’t an entirely new approach for banks. Some institutions had already opted for ad servers because they are more cost-efficient than traditional marketing platforms and better suited for running highly personalized campaigns — something marketing platforms are not designed for.
This foresight will give these banks a significant advantage. With the appropriate tech stack already in place, they can build their commerce media capabilities by incorporating third-party offerings alongside their in-house promotional campaigns. This enables them to engage with their customers in new and innovative ways.
