Financial Services Affiliate Compliance: Tips to Stay Compliant & Avoid Legal Action

Here’s how your financial services company can overcome the compliance challenges of an affiliate marketing program.

Believe it or not, financial services advertisers commonly venture into affiliate marketing without considering the significance of compliance.

Financial companies should be no strangers to compliance. They already navigate a thicket of industry-specific legal requirements and endure constant scrutiny from regulators. However, they don’t always understand how compliance affects their affiliate marketing programs.

While such programs operate at arm’s length through publishing partners, they’re still subject to affiliate compliance requirements.

Read on to learn more about the importance of regulatory compliance in affiliate marketing for financial services firms.

Affiliate compliance matters for financial services brands of all sizes.

Large companies, such as Discover, American Express, and HBSC, typically understand it best. These businesses are under constant regulatory scrutiny and have been for a long time.

But compliance also impacts smaller organizations. While they may not be on regulators’ radar today, they very well may be tomorrow.

The reason: growth.

Naturally, the goal of these affiliate programs is to grow the business. That same growth will give smaller financial institutions the scale that’s likely to draw regulatory scrutiny. It’s just one more reason compliance should be taken seriously, regardless of your size.

Honesty and transparency are essential to finserv compliance.

One important aspect of compliance is making honesty and transparency part of every offer to consumers. This means all offers should be free of errors, which doesn’t just protect the consumer but also the advertiser.

Let’s say a publisher promotes an incorrect bonus, term, or APR. This information can be misleading and may hurt the customer.

Flawed offers can affect the reputation of the bank or financial institution, as well. They create additional work, since businesses must correct errors to ensure they treat customers fairly.

This is why it’s so important to work with an affiliate agency like Gen3. An experienced agency establishes processes and works with affiliate partners to reduce the chances of errors ever happening.

Beyond risk management, if errors do happen, a good agency will have a system to identify affected customers. They’ll also have a mechanism to correct course quickly.

Proactive compliance monitoring enables financial brands to identify and address issues before they’re a bigger problem.

How do finserv marketing agencies bring clarity to compliance?

Risk mitigation is key to successful affiliate compliance. The best marketing agencies will have critical experience and the core processes necessary to keep your program in line.

Card Feeds

Gen3 Marketing reduces errors using processes that can easily update offers for all publishers. One of these processes is known as a “card feed,” which is specific to credit cards.

Here’s how it works:

• First, we leverage an API feed. This includes relevant details about a credit card offer (i.e. APR, marketing bullets, balance transfer fees, welcome bonus).
• If details of the product change, such as the APR, we go in and update the card feed.
• When we make updates, these updates reflect on publisher sites immediately.

Removing manual processes for publishers limits the risk of outdated or incorrect offers. Changes are made quickly and automatically. This process brings confidence to marketing and compliance teams.

PDF Summaries

Another key approach to affiliate compliance calls back to the basics: We provide a simplified PDF summary for publishers.

Within this summary, publishers get a bird’s eye view of offer details. The PDF includes specifics around each product, including any restrictions or editorial requirements.

For example, we wouldn’t want to include a premium travel card in a secured card category. Similarly, we wouldn’t want a cashback card in a balance transfer category.

A simple document lays out these guidelines. Partners can reference this document whenever they’re creating new product content. This helps reduce errors, since we are educating partners on the front end.

Internal Testing

Gen3 Marketing conducts internal testing to ensure compliance teams are familiar with industry rules and regulatory requirements.

As an example, we require our team to review and test for knowledge of UDAAP—a law that resulted from the 2008 financial crisis. UDAAP protects consumers from unfair, deceptive, or abusive acts or practices.

Through these exercises, we stay sharp and can keep clients in the financial services sector ahead of any potential issues.

Classification Rules

One of our most powerful tools is a system of classification rules. We built this process around a document that identifies all possible program errors ranked by severity. This document also details the appropriate actions we can take to correct each of them.

For the most severe errors, we’ll break affiliate tracking links or set up a redirect. This keeps users from accessing the landing page of the advertised product or service.

Here’s an example:

• A customer applies for a product that advertises $150 cashback.
• In reality, it’s only $100 cashback—a $50 difference.
• This is a direct compliance violation, as it’s a misleading offer.

Interestingly, the inverse—while still an error—might be resolved without breaking links.

For instance, let’s say an affiliate partner advertises $100 cashback when the offer is actually $150 cashback. People wouldn’t consider this harmful to the consumer (it’s technically in their favor). It’s also not normally a cause for regulatory concern.

Even so, from a user experience standpoint, we should still correct this discrepancy.

This is exactly what the classification list does. It provides insight into error severity, ensuring the right corrective steps are taken quickly and confidently.

What happens when finserv compliance errors occur?

A proven track record and healthy affiliate program are a strong defense against errors. However, considering the complexity of the channel, errors can still slip through.

When errors do occur, having a way to fix them at scale with a clear audit trail for both the internal compliance team and regulators is extremely valuable.

One advantage of an agency partner like Gen3 is the ability to leverage in-depth expertise across a broad range of categories and advertisers. This includes the work we’ve put into developing our finserv compliance program.

We built our compliance program to focus on the audit trail. When auditors come in asking about processes, we can show exactly what we do to mitigate potential issues. We can even share how we’ve documented and rectified any errors.

Being able to track errors over time brings confidence to the process. We keep track of partners who are seeing the same error occurring. As a result, we can work to educate or remove them if the risk outweighs the benefit.

Visibility into compliance issues across multiple programs helps us anticipate problems so we can be proactive instead of reactive.

Accurate reporting and compliance tracking help financial brands stay ahead of regulations and avoid risks.

Leverage agency expertise to grow your finserv affiliate program.

Financial affiliate marketing is fundamentally different from other types of affiliate marketing due to the regulatory aspect. There are very specific rules about how you can market these products while ensuring honesty and transparency. Providing documentation of your processes can give institutions confidence that you take compliance seriously.

Gen3 Marketing manages affiliate programs for a broad range of financial institutions. We’ve done it all, from global banks and crypto startups to everything in between.

Over the years, we’ve developed unmatched expertise in affiliate compliance for the financial services industry. That expertise can make all the difference. It helps financial services and fintech companies benefit from the growth that a good affiliate marketing program can provide.

Stay compliant as you grow your affiliate program. Message us to see how we can help your financial services affiliate program grow.

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