Be sure to do compliance review early in the creative process.
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Capturing a member’s share of wallet has always been a challenge for financial institutions, including credit unions. Given today’s economy, credit unions are working even harder at gaining new members and retaining the ones they have. New or enhanced products and services provide a great way of accomplishing this objective.
However, marketing and advertising the credit union’s products and services can be a challenge. Offers that were the norm just last year have shifted in a different direction. Effective, creative and innovative marketing drives business to the credit union, capturing the credit union’s market share. Remember, now is not the time to cut back on the credit union’s marketing budget but instead is a good time to be adding to it.
Attracting Millennials as Members
With the rise of fintechs offering financial services similar to traditional financial services, gaining the millennial generation as new members may be more challenging than gaining other generations. Millennials are digitally savvy, so credit unions should focus on ways to market to this age group by demonstrating the benefits of offering both a personal financial experience and the digital tools millennials have become accustomed to using. This generation is likely working at the credit union, so survey staff to learn what they are looking for in digital services and explore the possibilities of expanding such services. Target advertising to reach out to members of this younger generation who would benefit from and enjoy the combined personal financial experience credit unions are known for with the digital experience they appreciate.
Make Marketing Campaigns Interesting and Entertaining
Capturing the audience of prospective members across all generations may be more successful if the campaign provides relevant, valuable and consistent information while providing a more entertaining experience. Quality content marketing can be achieved in multiple ways.
Get creative by using a combination of text and information graphics or infographics. Infographics are visual representations of information or data that can be informative, fun and interesting while conveying the importance of the product, service or message the credit union is promoting. For example, a combination of infographics and text can be used when educating members about the importance of protecting themselves against identity theft.
Create a refer-a-member campaign. This is where members are rewarded when someone they refer becomes a new member of the credit union. Kick it up a notch and offer more than one way to reward members. For example, if newly referred members open a checking account, members may receive a specified reward, but if newly-referred members open a checking account and are approved for a loan, members may receive an even greater reward.
Try creating e-books specific to the products the credit union sells. The credit union could also create e-books that speak to questions asked on Google and other search engines. For example, consider targeting people searching for “budgeting for college students” within a 10-mile radius of the credit union, then send them the e-book the credit union created on budgeting for college students and prompt them to contact the credit union.
Don’t forget about traditional direct mail advertising techniques, which can go a long way if the collateral is creative and entertaining and draws the attention of the age group the credit union intends to entice. Receiving a vibrant, creative postcard in the mail from the credit union is more likely to be read, whereas a lackluster postcard containing only informative text may just get tossed.
Regulation Requirements and Mitigating Risks of Non-Compliance
Creating a regulatory-compliant advertisement that communicates the credit union’s products and services that is also appealing to members and potential members can be complicated. No matter what product or service the credit union chooses to advertise and whatever type of media is used, the advertisement must be attractive enough to gain attention, but it must also be compliant with federal regulations and state laws. One simple term can trigger the requirement to include lengthy disclosures in the advertisement, depending on the product or service that is promoted. Non-compliant disclosures increase the credit union’s regulatory and reputational risks.
To mitigate such risks, credit unions should have well-established processes in place to make sure all marketing materials are reviewed for compliance with applicable regulatory requirements. Compliance staff knowledgeable about the various marketing and advertising rules, regulations and state laws must review them.
Involve compliance staff in the early stages to reduce the risk of having to make multiple edits to the advertisement because it contains terms that trigger additional disclosures or because the disclosures do not comply with applicable requirements. Each product or service the credit union promotes has different disclosure requirements, and it is important not to confuse one product’s disclosure requirements with those of another.
Compliance staff will also know when specific disclosures may not be required when utilizing various delivery channels. For example, the National Credit Union Administration’s Truth in Savings rule exempts certain disclosures for certain advertisements, such as television ads or signs located inside the credit union’s branches. This is the reason having advertisements reviewed by someone knowledgeable about advertising requirements is so important.
Strive to be creative early and often to attract potential and current members. Always remember to have advertisements reviewed by someone knowledgeable about advertising rules, regulations and state laws to ensure they are fully compliant. Develop marketing and advertising checklists, as they can be very useful tools to assist both marketing and compliance staff with regulatory requirements. And consider consulting legal counsel to conduct your reviews and answer your staff’s questions about compliance.
Lisa Hudson Kim is an experienced attorney practicing in the Virginia Beach office of Kaufman & Canoles, P.C., with its credit union team. Kim has more than two decades of commercial litigation experience, including compliance issues and representation of credit unions and financial institutions throughout Virginia state and federal courts. She is also admitted to practice in North Carolina. Reach her at 757.491.4017.
Joyce A. Johnson Keehan is a paraprofessional working with the credit union group at Kaufman & Canoles out of the firm’s Raleigh, North Carolina, office. While not an attorney, she brings to bear on issues confronting the firm’s clients four decades of practical, hands-on compliance experience in the credit union community. Reach her at 984.222.8106.
Reach out to the credit union team at Kaufman & Canoles to review your credit union’s advertisements to ensure regulatory compliance or answer any questions you may have.