Member Exclusive

Incumbents take the pedal off ad spending to compete with fintechs

  • Banks and insurance companies are redistributing their ad spend budget to technology and innovation to compete with challengers.
  • Insurance companies will account for 45.6% of the industry’s ad spend.
close

Email a Friend

Incumbents take the pedal off ad spending to compete with fintechs

Digital ad spending in the financial sector is likely to slow down in 2021, according to Insider Intelligence. The rapid rise of fintechs will likely force the industry’s incumbents to reel back on ad spending. Instead, they’ll turn their attention and funds to technological innovations to compete with fintechs. 

Source: Insider Intelligence

Financial services institutions are expected to spend up to $24.5 billion on digital ads in 2021. Although that’s still some $4 billion more on ad spend than in 2020, spending growth is expected to grow by 16.7% -- that’s down from the 20%+ growth in 2019 and 2020. This trend is expected to continue over the next three years. The financial services industry will collectively spend more on digital advertisements -- up to $30.8 billion -- but ad spending growth will slow to 11.3% by 2023. 

When the pandemic reached the U.S. in March 2020, the financial sector redirected much of its energy to go digital. While banks and institutions helped customers migrate to their mobile apps, they also expanded their digital services to provide a more holistic online experience in the face of shifting needs. In some cases, the change required increased investment in their technology departments. Bank of America’s chief operations and technology officer Cathy Bessant told the Financial Times that BofA had been training some of its staff skills like coding and data analytics since 2018. In the last 12 months, more than 80% of hires at Bessant’s office have been internal-- a 39% increase from before the pandemic. 

Incumbents will continue to focus on digitization and automation to keep pace with challenger banks. However, a decline in premiums might force insurance companies to woo customers with personalized advertising.

0 comments on “Incumbents take the pedal off ad spending to compete with fintechs”

Outlier OpinionsMakers

10-Q, Member Exclusive

How Affirm Card plans to kill credit cards

  • How would you dub a card that has the practicality of a debit card with the added functionality of a credit card? That's the Affirm Card.
  • Launched in early 2021, the Affirm Card has been in the spotlight lately. But what led to garnering significant attention now?
Sara Khairi | December 04, 2023
10-Q, Member Exclusive

Robinhood unveils a 5% APY for Gold members, but how will users respond?

  • Robinhood's recent move to challenge traditional banks includes its increased savings offering, a 5.0% APY for Robinhood Gold Members. 
  • The stock trading platform appears to be in a precarious balancing act, grappling with the escalation of deposit strategies while facing a decline in both transactions and monthly active users.
Sara Khairi | November 20, 2023
10-Q, Member Exclusive

Q1’24 affirms Affirm’s upswing in BNPL

  • Affirm's quarterly results indicate that back-to-back enterprise collaborations in conjunction with collective strategies are eventually winning out keeping the firm on course.
  • Going forward the BNPL provider intends to focus on continuing to invest in risk management, technology, and product development.
Sara Khairi | November 13, 2023
10-Q, Member Exclusive

Q3: The PayPal story isn’t over

  • PayPal saw improved earnings in the third quarter compared to the previous one.
  • Chriss answered some of the burning questions and gave a bit more color on what firm assets could require more work to turn around than he thought.
Sara Khairi | November 06, 2023
10-Q, Member Exclusive

Ted Pick is Morgan Stanley’s new leader. Where does it go from here? 

  • The question, 'Who will succeed James Gorman at Morgan Stanley?', that echoed in Wall Street's nooks and crannies has finally been answered.
  • The present and incoming CEOs might have different management styles. What they both share, however, is a shrinking economy and growing macroeconomic pressures at the time of assuming control.
Sara Khairi | October 30, 2023
More Articles