Why ‘FinProm’ is the latest stress test for FinTechs

FinProm. It might sound innocent enough. But in reality, these two small syllables represent a mountain of risk for FinTechs, banks, trading platforms and other financial institutions. FinProm, short for financial promotions, is the catch-all term for how finance brands market their products to customers. That means everything from YouTube ads and TfL posters, to in-app nudges and influencer collaborations. Like most things in finance, it’s an area that’s heavily regulated. And, in today’s fast-moving marketing world, it’s something that’s starting to trip companies up. 

Navigating FinProm

Just this year, we’ve seen Robinhood fined $26M for regulatory breaches which included failure to properly oversee the influencers plugging their platform. And three UK “finfluencers” recently landed in court for falling foul of FCA FinProm rules. As the fly-wheel of content creation speeds up, fuelled by AI tooling, FinTech brands are facing a high-stakes conundrum: how can they keep pace with modern marketing strategies without running the risk of breaching the litany of rules set by bodies stretching from the FCA to the ASA?

Currently, fintechs and banks try to stay on the right side of the regulations by running all of their marketing content and promotions through their compliance teams. These experts review each image, video and piece of copy and suggest revisions. In the quest for compliance, this back and forth causes all sorts of friction. It slows down pace, waters down creativity, and burdens both teams with an admin-burden they’d rather do without. 

The results? A slow marketing process which can’t capitalise on trends, nor tap into the rapid content personalisation and iteration made possible by the AI era. This means less growth and customer acquisition in a highly competitive market. The alternative? Playing fast and loose with compliance procedures in order to maximise marketing output. This might drive sales, but it could also drive firms right into the arms of some unhappy regulators. 

Decision Time for FinTechs

This clash of priorities is creating the ultimate stress test for FinTechs and other financial organisations as they seek to find equilibrium between content and compliance in a world which demands more marketing output, delivered faster than ever before. 

And it’s a stress test they cannot afford to fail. Regulators like the FCA are cracking down and the consequences of enforcement action can be devastating. And, as brands expand to new markets, the risk will only grow as they find themselves having to contend with an expanded set of regulators and rulebooks across the globe. 

FinTechs can’t bury their heads in the sand on this issue. They must heed the cautionary tales we’ve seen in recent months and reset their FinProm blueprint. The AI-powered age of marketing can’t be capitalised on if it’s supported by old-school compliance processes. Nor can it afford to ignore the very real threat of a regulatory mis-step. To create a truly modern brand that is free to embrace the latest marketing strategies, compliance strategies need to be stepped up and modernised in tandem. Innovation on one side of the FinProm coin must be counter-weighted by innovation on the other.

FinTechs and finance platforms are used to pushing boundaries and disrupting the status quo. But to enable this to continue safely, effectively and on the right side of the law, the same energy and innovative zeal should now be applied to compliance. Without it, brands will be exposing themselves to risks and costs they likely cannot afford. 

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