The concept and types of financial advertising
Financial advertising is the advertising of financial, banking, insurance, and investment services and other services that involve the use of funds from individuals and organizations, as well as securities.
The main task of financial advertising is to serve the sphere of providing or obtaining loans, insurance, sale of stocks, bonds, and pension funds.
Reasons for using financial advertising:
- Financial and economic crises that damage the reputation of organizations;
- Low level of trust in financial institutions;
- Decrease in the investment attractiveness of credit and financial institutions;
- Formation and maintenance of the attractiveness of financial institutions;
- Lack of liquidity in banks.
Crises are changing attitudes towards financial and banking advertising. Insurance, investment companies, banks, and other financial institutions view advertising as a voluntary business tax. The main task of promoting financial services is to actively attract clients to the financial sector.
Types of financial advertising:
- bank advertising;
- self-help societies and private medical organizations (health insurance services);
- construction companies that attract funds from bank depositors to purchase housing;
- advertising of insurance services;
- creation of investment trust funds;
- the possibility of obtaining banking services at post offices;
- brokers and financial advisors who deal with investments, insurance, and subsidies;
- companies that work with credit cards;
- financial advertising of short-term loans.
Which advertising medium to choose for promoting financial services depends on the target audience. These are mainly popular media, namely the press, radio, and television. Recently, advertising of banks, insurance companies, and other finance and credit organizations can be found on the Internet. This includes contextual advertising, banner advertising, and email newsletters.
Features of banking advertising
In modern conditions, the total volume of advertising expenses of many banks is large enough for these financial institutions to firmly occupy 4th place after car manufacturers, trading companies, and publishing houses. Effective advertising affects the reputation of the bank, its images, and sales results. Features of bank advertising: Intangibility; Intellectuality; Individuality. Banking services cannot be shown, touched, picked up, heard, or tasted. They are intangible. Until the moment the service is purchased and the process of providing it to the buyer, it is almost impossible to understand whether it will benefit or not.
Therefore, bank advertisements show images: money, plastic cards or animals, items that have nothing to do with banks. The right choice of advertising images is very important for consumers to understand the essence of advertising.
Intelligence means that the intelligence of the banking service provider is the primary means of production. It is in bank advertising that one can see how the intellectual qualities of manufacturers are extolled. This is precisely the direct result of the intangibility of banking services. Since there is no way to directly show a banking service or product, the bank uses the image of a manufacturer as a means of persuasion. This is due to the fact that a positive attitude towards the manufacturer will automatically be transferred to services or products.
Working with money implies the trust of clients, therefore, an individual approach is provided to each person who comes to the bank. Many services have long-term validity (plastic cards, deposits, cells, etc.). Therefore, the ad uses the theme of customer trust and personalization.
In addition, banking advertising is distinguished by a variety of services provided. As a rule, banks promote each service separately, but at the same time, all ads are united by a single corporate identity.
Legal regulation of advertising of financial services
There is an article in the Federal Law on Advertising, which reflects all the requirements for financial advertising. NOTE 2 Advertising of financial, banking, insurance, and other services must necessarily contain the name of the person or the name of the organization providing these services, i.e. the name of the bank or the full name of the individual entrepreneur.
The main limitations in financial advertising:
- Advertisements should not include guarantees or promises of performance, i.e. profitability of investments in the future (including those based on actual indicators in the past, if such efficiency cannot be detected at the time of the conclusion of the contract);
- There should not be hidden other conditions for the provision of the relevant services that affect the amount of income received after using the services of a person, or the number of expenses incurred by the persons who used the services if the advertisement mentions at least one of these conditions.
If an advertisement is related to the provision of loans or its repayment contains at least one condition that affects the cost, then such an advertisement must contain all other conditions that determine the actual cost of a loan to a bank client.
- Advertising of banking services related to the management of clients' assets (securities, investment funds, pension funds, mortgages, etc.) must contain:
- The source of information that must be disclosed in accordance with the Federal Law;
Information about the place or address where, prior to the conclusion of the contract, interested parties can familiarize themselves with the terms of asset management, receive all the necessary information.
Advertising is prohibited by law, which is associated with the attraction of funds from individuals for the construction of housing. Advertising is not allowed prior to the issuance of a building permit. In general terms, the requirements of the law for advertising financial services are quite strict. But these restrictions can be considered quite justified goals of protecting the rights of inexperienced and gullible investors and investors.
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