• Financial Media Networks use their own customer data to create effective advertising campaigns.
• They provide advertisers with more comprehensive customer behavior data than Retail Media.
• The main challenge lies in ensuring transparency and protecting customer data to maintain their trust.

In recent years, interest in Retail Media (Retail Media Network, RMN) has been growing in the advertising industry. However, due to limited access to buyer data, banks and other financial institutions are seeing an opportunity to take a significant share of the advertising market.

This is where Financial Media Networks (Finance Media Network, FMN) come into play. But what are they, and why are they important? And why should advertisers pay attention to them?

What are they?

FMNs are advertising platforms created by financial organizations that use their customer data to create personalized advertising or improve targeting.

For example, in April, Chase Bank launched its advertising business called Chase Media Solutions. That same month, European bank Revolut announced plans to develop in this direction. Even the "buy now, pay later" service Klarna has been building its own advertising platform over the past few years.

Other examples of global FMNs: American Express Media Network, Mastercard's Digital & Marketing Solutions, Visa Advertising Solutions, Capital One Media, Barclays Media Solutions, HSBC Advertising Services, Wells Fargo Media Network, Citibank Marketing Solutions.

Russian FMNs: SberMarketing, Tinkoff Marketing, Alfa-Bank Marketing, VTB Marketing, Raiffeisenbank Media, Gazprombank Media, Otkritie Marketing, Promsvyazbank Marketing, Rosbank Media, Sovcombank Media.

In addition to banks, payment systems like Yandex.Money (YuMoney) and WebMoney have also created their own divisions that use their customer data to create personalized advertising campaigns.

But why have these companies decided to enter the advertising business?

«Currently, in the USA, UK, and other countries, there is significant regulatory pressure as well as competitive threats like BNPL, which are reducing the market share of credit cards», says Grace Broadbent, senior payments analyst at eMarketer.

In other words, a combination of competitive and regulatory factors is pushing banks to diversify their revenue sources before the situation worsens.

How is FMN different from RMN?

As the name suggests, FMNs are financial organizations (e.g., Chase, Revolut, PayPal) that create their own advertising platforms. RMNs, on the other hand, are retailers (e.g., Walmart or Target) that also create and manage their own advertising networks.

The main difference between them lies in the scope of the data they have access to.

Retailers have information only about purchases made in their stores. For example, Walmart knows about purchases only in their stores, but not at other retailers. FMNs, however, have a broader and more diverse set of primary data. For example, Chase Bank tracks the movement of funds for about 80 million customers. This means they have a complete picture of their customers' habits and interests across all stores, not to mention the salaries deposited into their accounts.

Why are FMNs important?

Both RMNs and FMNs are actively developing.

According to eMarketer, RMN spending this year will reach $140 billion, up 21.8% from last year. By 2027, RMN budgets are expected to match social media budgets, becoming the second largest advertising spending channel.

Who wouldn't want a share of this market? Any FMN can «monetize its first-party data to diversify its revenue sources in two ways», says Ellen Savage, vice president of media at Mindgruve. «[First,] advertising revenue and [second,] customers [FMNs, such as Chase] make more purchases with their credit cards thanks to such targeted ads.»

What attracts advertisers to FMNs?

While the phase-out of third-party cookies has been delayed again, it will happen sooner or later.

«This forces advertisers to look for new ways to identify potential audiences (without using third-party data), and RMNs are starting to offer this opportunity», says Katrina Stroh, vice president of independent media agency Media+. «It's no surprise that new channels like FMNs are emerging, finding ways to monetize their customer data as a new source of advertising revenue».

That's why advertisers are already looking for alternative ways to use first-party data in compliance with privacy regulations, trying to stay ahead of their competitors. As April Weeks, chief investment and media officer at Basis Technologies, says, the safe use of first-party data is the way of the future.

«Advertisers have always sought ways to improve targeting accuracy, and this is another tool in their arsenal», she notes. «It's the approach of delivering the right message at the right time to the right consumer within a protected ecosystem».

Given the vast amount of data FMNs control, they can offer more opportunities than most existing RMNs.

«RMNs are often only available to advertisers actively selling on their marketplaces», says Stroh. «However, since FMNs don't sell anything themselves, they are willing to share new opportunities with advertisers and retailers focused solely on selling through their own websites», she adds.

What is the problem?

Given that we are dealing with a completely new set of data previously unavailable to advertisers, privacy is a huge issue.

FMNs need to ensure a high level of transparency for customers so that everyone understands exactly what is happening with their data to maintain trust.

«If you, as an FMN, work transparently and clearly, and give consumers choice and control over the situation, then it is acceptable», says Jonathan Joseph, head of data operations at Ketch.

The question is whether FMNs will give their customers the option to "opt-in" to this data usage and whether they can "opt-out"?

For Publishers

Perhaps, this is another way to increase revenue from your user data. Don't forget to collect their data. It's important.

Forecast

More financial institutions will start creating their own advertising networks to monetize their first-party data. In response, regulators will demand stricter compliance with privacy and transparency standards.

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