How can digital solutions add concrete value in financial marketing materials?

Financial service players are embracing new ways to create and distribute marketing materials, improving compliance – and client experience.

In brief

• Financial service providers have to produce accurate, compliant marketing materials in an evolving regulatory environment.
• Increasingly, a cross-border element is involved, adding an additional layer of complexity.
• Using legal managed services is a cost-effective option for in-house lawyers in need of end-to-end digitized regulatory solutions

Marketing materials play a major role in the success of a financial institution and set the standard for the quality of services clients can expect to receive. If produced properly and appropriately, marketing materials provide an accurate overview of the product (strategy, performance and manager pedigree). This supports the decision-making process of a potential investor and is a useful tool for asset managers seeking to secure commitments from investors.

However, financial service providers face multiple challenges when producing and distributing marketing materials. These include:

• A highly complex and evolving regulatory environment, which also affects marketing materials
• Need to adapt to new market trends and financial instruments
• Growing in banking/investing abroad with an increase in cross-border distribution, requiring compliance know-how across borders
• Alignment with specific product documentation when producing marketing materials, since the latter should accurately reflect the features and characteristics of the financial instruments they promote

Regulatory challenges are accompanied by disruption from digital technologies, which are reshaping the financial industry. This demands rapid transformation of financial players across areas such as regulations, technology and market trends. At the same time, technology holds great promise for financial players as they adapt to new regulatory amendments and seek to produce compliant marketing materials. Most financial players already distribute marketing materials to their clients through digital channels. Enhancing legal and compliance processes with technology as well increases efficiency and improves speed and agility in adapting to upcoming regulatory changes and trends.

Paper vs. digital rules

The term “digital transformation” often gets thrown around in our ever-changing business environment. It’s a catch-all term that describes new and emerging digital technologies to enhance business processes, achieve higher efficiencies and improve the customer experience. Regulations abound, yet legal compliance remains in the background. Legacy processes are common, with manually updated tables and significant papering. When different rules sets need to be combined and applied at the same time, complexity usually increases as does the manual effort required. We see this with the production and distribution of marketing materials, where financial service providers have to consider –regulations in its licensing jurisdiction as well as any cross-border regulations and product distribution regulations. The more the industry evolves, the more complex it becomes, leading to slower manual processes, inefficiency – and higher risks.

Providing digitalized content reduces the challenges of operationalizing regulatory guidelines and ensures that most up-to-date regulatory restrictions are provided. It’s also an opportunity to support in-house teams with an easy and user-friendly platform. 

Digitalizing your rules enables you to build a set of marketing material requirements rules and disclaimers per country. These are designed to cover relevant financial services and products tailored to your specific needs.

A centralized approach

At the core of a compliant marketing material process is alignment with different regulations. The most efficient way to capture all relevant details is to establish a centralized and standard process that considers local regulations, cross-border rules, product specific regulations, etc. This process should be developed in conjunction with cross-border rules governing the distribution of products abroad and includes various compliance checks, such as:

• License of the distributing entity: local license, passport, etc.
• Local rules linked to the production of the marketing materials
• Residency of the target investor
• Category of the target investor: qualified or retail
• Distribution channel: classic channel, video, social media, etc.
• Alignment with legal product-specific documentation: prospectus, KID, etc.

In addition, marketing materials can differ depending on the channel used for distribution, the content and target audience.

By using a solid regulatory database together with accurate and timely product information, financial service providers can develop compliant marketing materials tailored to the specific situation. With a central process in place, you can be confident that materials will reflect local regulations, product distribution regulations and cross-border rules.

Marketing materials in the future

The dynamic nature of financial markets and increased competition require financial service providers to remain flexible, agile and innovative. This ability to adapt is crucial not only to reach a new generation of investors, but also to retain existing clients. Industrial production and financial markets, both globally and in the EU, are undergoing radical digital transformation. New advanced techniques rely primarily on innovative digital technologies, which cannot work in isolation, but are based on connected ecosystems delivering collective technological breakthroughs.