Why playing it safe with marketing is costing your bank market share

It’s not enough to be financially sound — banks today have to be seen, trusted and remembered. Products are increasingly commoditized, customer expectations are rising and tech-driven banks are capturing market share. To compete, community and mid-sized banks need more than strong balance sheets — they need strong communication. .Yet many institutions continue to undervalue marketing, not out of neglect, but from a long–held belief that it’s risky, optional or secondary to core operations. Marketing is often approached as a checklist: a quarterly newsletter, an occasional blog post or a few paid ads. The focus is on what feels more predictable — financial performance, compliance and operational execution.However, when marketing is treated as an afterthought, it can’t deliver real business impact. It must be approached as a strategic function to drive growth and stand out in a crowded market — just as essential as lending or finance.That mindset is especially costly now. Marketing has become a defining competitive advantage as customer expectations shift and digital-first competitors invest heavily in brand and experience. Customers expect more than products — they expect clarity, relevance and a connection to their financial goals. If your institution isn’t delivering that, you’re not just at risk of being ignored — you’re at risk of being replaced.The cost of underpowered marketingThe consequences of underinvestment in marketing are real. When messaging is internally focused or overly formal, it fails to engage customers. Banks that rely on jargon-heavy language or default to technical details that customers can’t decode blend into a crowded marketplace.A 2023 Deloitte Banking Survey found that 59 percent of customers couldn’t distinguish their bank from competitors. That lack of differentiation doesn’t just weaken your brand — it stalls customer acquisition, reduces loyalty and limits opportunities to grow deposits or cross-sell services. In short, it’s not just a brand problem—it’s a barrier to business growth.Consider a midwestern regional bank that recently launched a campaign for a new checking product. The marketing centered entirely on internal specs — interest rates, overdraft rules, internal processing perks. Six months in, new account openings remained flat.The issue wasn’t the product — it was the framing. Customers didn’t see how the new offering fit into their financial lives. The bank missed the mark with real-world pain points. It overlooked what customers actually care about: simplicity, value and trust. This is a common mistake — when messaging defaults to technical details that customers can’t decode, it loses sight of the only thing that matters: relevance. To stand out, banks must translate features into tangible benefits that resonate with everyday needs and emotional drivers like financial peace of mind.Differentiation starts with relevance. Messaging must frame products in terms of customer benefit, not just institutional features.The competitive cost of silenceYour competitors aren’t staying quiet. Fintechs and digital-first banks like Chime and SoFi are investing heavily in customer-focused messaging—and it’s paying off. They’re growing not just because of sleek apps, but because their brands communicate consistently and in ways that resonate with modern customers. According to a 2024 Accenture report, digital-native banks captured 14% of new retail deposits in the last year, primarily due to differentiated customer experience and better brand communication.Digital-first banks are growing because they articulate their relevance. If you’re not doing the same, you’re not just falling behind — you’re giving up ground.Rigor, not risk: Making marketing work within complianceBanking is a highly regulated industry, and for good reason. But that doesn’t mean your marketing needs to be flat or formulaic. Creativity and compliance are not opposites—they’re partners in effective communication when approached strategically.Take Ally Bank, which built its reputation through bold, people-first messaging and transparent product communication. Campaigns like “Do It Right” and customer-friendly language across their digital platforms resonated precisely because they prioritized clarity and regulatory alignment. Similarly, First Republic’s brand trust stemmed from emotionally resonant storytelling and consistent messaging that never crossed legal boundaries.The key? Involve your compliance team from the start—not as a final gatekeeper, but as a collaborative partner. This early alignment helps avoid costly rewrites, shortens review cycles, and leads to sharper, more confident messaging.Creativity doesn’t need to be sacrificed at the altar of regulation. When compliance is integrated early, you gain clarity, credibility, and control—all without losing the human voice your customers need to hear.From soft to strategic: Making marketing accountable Marketing in banking has long been dismissed as a soft skill—difficult to measure, easy to cut. But that mindset is no longer viable. With today’s platforms and analytics, marketing is just as measurable as lending or operations. Banks that embrace this shift are seeing results.Accountability starts with the right metrics. If you’re not already tracking them, these three should be non-negotiable:Customer acquisition cost: How much does it cost you to gain a new customer, and how can that cost be reduced through smarter targeting?Customer lifetime value: What is each customer worth over time, and how can marketing drive higher-value relationships?Conversion Rates: Are your campaigns actually moving people from awareness to action?Platforms like HubSpot, Salesforce, and banking-specific CRMs now offer complete visibility into ROI — from initial engagement to long-term retention. And the data backs it up: A 2024 McKinsey report found that banks using advanced analytics in marketing saw customer acquisition increase by 10–20% compared to peers still relying on traditional methods.This isn’t about turning marketers into data scientists. It’s about holding marketing to the same performance standard as any other core function—and unlocking growth through a more innovative strategy.Customer-centric marketing drives business valueIn a market where products and rates are often indistinguishable, your ability to earn trust becomes your greatest differentiator. That trust is built through communication. Banks that succeed aren’t just promoting features; they’re demonstrating an understanding of their customers’ needs, values and financial goals. This shift from product-centric to customer-centric messaging is more than a branding strategy — it’s a business strategy. A 2024 HubSpot report found that 68 percent of consumers are more likely to choose a financial brand that demonstrates empathy over one that simply lists product features. That kind of emotional relevance translates into stronger relationships and higher lifetime value.Consider Umpqua Bank, a mid-sized regional bank that built its brand around empathy, accessibility and community involvement. Their “Open account, open door” initiative wasn’t just a slogan — it was a brand promise that resonated with customers and turned a product into a relationship builder. This is the kind of relevance today’s banking customers expect.Conclusion: Stop treating marketing as optionalMarketing isn’t optional — it’s a core business function that should be managed with the same focus and accountability as lending or operations. It drives growth when tied to clear goals, consistent execution and real performance metrics.However, as the landscape shifts, treating marketing as an afterthought is no longer sustainable. Fintech firms, digital-first competitors and even big tech platforms are reshaping what consumers expect from financial institutions — faster onboarding, clearer messaging and stronger brand experiences. At the same time, regulatory pressures and rising rates are compressing margins and pushing banks to do more with less.In this environment, communication isn’t a soft skill — it’s a competitive edge. The banks gaining ground aren’t saying the most. They’re saying what matters — and saying it well.To move forward with purpose, start here:Audit current marketing for relevance and clarityAlign campaigns with KPIs that support growthIntegrate compliance into the creative processTreat marketing as a strategic function, not a cost centerIn a competitive landscape, silence isn’t safe — it’s invisible. Strategic marketing isn’t just good branding. It’s good business.Kelly Fletcher has spent the past 17 years building Fletcher Marketing Communications into a thriving national marketing and PR agency with a vision to influence behavior and enhance brand reputations. Working with regional, national and Fortune 500 companies, Kelly has 25 years in the full spectrum of integrated communications, specializing in the art and science of how people process messaging, problem-solve and make decisions. In 2024, Kelly launched Fletcher Financial Communications, collaborating with leading financial industry brands to navigate markets, shape public perception and drive success.