Should bank marketing stay in-house or rely on agencies?

A version of this article first appeared in the October BAI Executive Report: Anticipating banking’s 2025 marketing trends. Check out more of the issue for insight on data-driven budget asks, agency relationships, direct mail strategies and an AI boost for customer loyalty.

When it comes to financial services marketing needs, there’s an eternal question and 2025 will be no different: Should banks and credit unions generate messaging and campaigns in-house or tap agency muscle?

These days the question has a new layer. Has the buzz of artificial intelligence (AI) changed that pursuit? While the answer to either question can be as varied as the sector itself, one thing is certain: Less is definitely more as dollars are stretched.

“Marketing presents a unique challenge in the financial sector. It’s universally recognized as essential, yet often underfunded,” says Preetha Pulusani, CEO and founder of financial services marketing firm DeepTarget. “Banks and credit unions typically allocate limited resources to marketing while maintaining high expectations for results.”

Indeed, according to consultancy Gartner, marketing budget allocation in financial services (including banking and investing) has now dropped below pandemic-era levels.

“The risk of marketing entering a ‘new era of less,’ where budgets remain suppressed and future budget growth is not ensured, is increasingly likely,” Gartner consultants say in its 2024 Marketing Budget Benchmark for Financial Services.

“In my conversations, CEOs and CFOs clearly prefer to max out the internal marketing team to address as much of their needs as possible. Slowing activity and revenues – thus margin compression – have made scrutiny for using external marketing firms beyond the obvious a more highly scrutinized activity,” says Richard Hall, managing director of banking and financial services at BKM Marketing Associates Inc.

“Plus, many agencies only offer enhancements to similar in-house staff rather than clear augmentation to make marketing more robust and valuable in direct revenue generation,” he adds.

However, it also comes down to expertise, according to Richard Dedor, vice president of marketing at Premier America Credit Union. “It’s cost, but on two levels. The cost to hire and do the work in-house versus the speed to market by going to an expert in the field.”

“Most marketers outside of agencies are jacks-of-all-trades,” he continues. “You need experts for your media and creative teams. You need those things to be on point. So, you may spend a little more overall but get much better output.”

Three fundamentals

In today’s dynamic and competitive environment, fostering strong internal and external marketing relationships hinges on three fundamental best practices: transparency, continuous communication and data-driven analysis, says Ryan Marosy, head of marketing for Affinity Federal Credit Union.

“Transparency builds trust and alignment by openly sharing strategies and performance metrics. Continuous communication ensures that all teams stay coordinated and responsive, swiftly addressing issues and adapting to changes,” he says.

“Meanwhile, data-driven analysis provides a robust foundation for evaluating effectiveness and making informed decisions, ensuring that our strategies are both impactful and aligned with our objectives.”

But Marosy cautions that external dependency can limit an internal team’s timely awareness of industry changes, which can impact messaging, but also can feed further reliance on external partners.

This dependency can hinder the organization’s ability to adapt, might increase costs in the long run and risks severing the intracompany ties that drive efficiency and fund new initiatives.

AI alters the landscape

As it is in many industries, artificial intelligence (AI) is shaking up the financial services marketing space.

“It comes down to results, and the intersection of data, AI and automation are often enhanced with the right external partners to help bring them to life,” Dedor says.

According to Pulusani, “technological advancements in data analytics, AI, automation and performance KPIs are significantly influencing decision-making and driving the use of external sources. This can be seen especially in use of AI/machine learning to improve customer experiences, marketing automation platforms and even infrastructure related to marketing, such as cloud computing.”

However, some institutions are not yet allowing their employees to use AI tools as those companies further assess regulatory or legal considerations, consumer reputation and other factors.

“Some are not open to it, citing too many risks,” says Martha Bartlett Piland, president of Banktastic, a financial brands marketing agency. “Use of data, automation [such as AI] and other technology should be tools marketers are relying on daily. Unfortunately, a lot of people are not. For many, that definitely requires an outside partner or partners to help implement. And they don’t have the budget or access to internal approvals to pull all the pieces together. This puts them at a disadvantage over the long term.”

Looking ahead

For at least 2025, Pulusani anticipates a continuation of the hybrid model: Internal teams will likely remain responsible for core functions, such as branding, governance, customer insights, data analysis and digital strategy development, while specialized agencies will continue to handle areas including public relations, social media management and creative production.

“We’ve observed a growing trend among financial institutions to outsource their digital assets and marketing automation efforts to fintech experts. This approach effectively extends their internal capabilities, and we expect this trend to accelerate,” she says. “It’s a cost-effective strategy that allows these institutions to access specialized expertise at a fraction of the cost of full-time hires. This is particularly beneficial given that their in-house resources are often already stretched thin with numerous responsibilities.”

According to Hall, for “banks relying on only organic growth in 2025, the internal teams are going to continue to be asked to do more with what budget they have in place because the rest of operations will be leveraging the freed-up capital coming from interest-rate relief for direct-to-customer efforts.”

Strategy in practice

As marketing budgets remain largely suppressed, CMOs must “focus on productivity to support growth in lean times,” particularly in financial services, the Gartner report stresses.

Here are five factors that Gartner analysts say financial services CMOs setting strategy are already considering:

1. Rethinking resource investment strategies. CMOs are revisiting their major resource mix and may reshuffle, namely: labor, paid media, marketing technology and agencies and services. Paid media accounts for the largest share for financial services (29.7%).
2. Budget pressures persist. While relatively stable year over year, overall budgets in financial services mirror those seen across other industries, which have dropped significantly since 2023 (-15% year over year). With marketing budgets remaining at historical lows, the firm noted that the risk of marketing entering a new “era of less” — in which budgets remain suppressed and future budget growth is not assured — is increasingly likely.
3. Productivity expectations are high despite budget cuts. With nearly three out of four industry CMOs saying they feel continued pressure to do more with less, the focus on productivity to support growth must continue. But that can challenge staff burnout.
4. Media investment allocation favors paid digital channels. Investment allocation for banking and investing respondents continues to favor digital channels (61.7%) over offline channels (38.3%).
5. Program and operational priorities are shifting. Despite brand awareness being cited as a top marketing priority in 2024, only 7.4% of the marketing program and operation area budget is allocated to actual brand strategy and activation. That allocation is much lower compared to areas that take the top spots like demand generation (11.7%) and campaign creation and management (11.5%).

How best to boost productivity

In this environment, Gartner analysts offer some advice:

Reframe marketing’s value internally. Since 48% of banking and investing CMOs say the marketing function is perceived as a “cost center” internally, promoting the value of the marketing function to change perceptions with key internal stakeholders is critical. This is especially true with those who don’t view marketing’s contributions as strategic or core to the bottom line.

Gartner advises spending time designing strategic plans that clearly and measurably connect to broader business goals to justify marketing investment. Most lines of business have goals and growth plans, and clearly connecting these with marketing plans/investments is necessary to be perceived as a profit center internally.

Communicate media performance using the right KPIs. Limit metric types to a maximum of four so that marketing teams can take action from the data. Although transactional metrics are necessary to demonstrate performance, other metrics types are needed to provide a more holistic view of marketing’s impact.

Ruthlessly prioritize channel budgets. Finally, keep what works and change what doesn’t. If you struggle with digital marketing due to expertise or capability challenges, stop investing money in tactics or channels that have yet to make significant progress against your marketing or business objectives.

D. Hardesty is a contributing writer for BAI.