Facing tighter budgets and performance expectations, banks are reevaluating how they’re allocating advertising dollars in 2025. Many are shifting spending to high-performing digital channels and focusing on the local strategies that drive measurable results.
Bank marketers are spending 2025 with tighter margins, rising expectations, and a more focused goal: Justify every dollar spent. About 39% of financial institutions say their budgets will stay flat in the coming year, and another 7% claim it will decrease slightly or significantly. Sixty percent will allocate 5% or less of their revenue toward marketing.
The days of broad campaigns are going away, replaced by performance-driven strategies and constant pressure to prove ROI. Digital channels now dominate bank marketing budgets over offline channels, as banks focus on what moves the needle to keep and attract customers.
But spending looks different across the industry. Some banks are reallocating towards high-performing digital platforms. Others are testing new formats, automating creative work, or refining local targeting with more traditional tactics.
The challenge of driving new deposits and retaining customers, all while navigating shrinking resources, means banks are rethinking how they allocate advertising budgets and what success looks like.
Digital Channels Dominate
According to BAI, digital channels now represent nearly 62% of bank marketing budgets, compared to 38% for offline channels. This shift reflects a growing focus on platforms that deliver clear attribution and measurable results.
“Banks today are prioritizing digital channels for efficiency, scale, and personalization,” Lisa Nicholas, senior vice president of marketing products and strategy at Vericast, a marketing and data analytics company, tells The Financial Brand. “But smart marketers still use traditional media to reinforce messaging and connect locally.”
According to Vericast’s Lookback Trends that Will Define 2025: Banking Ad Trends report, financial institutions are narrowing their focus to the channels and tactics that deliver. Social media remains dominant, while display ads have declined. Since TikTok and YouTube have surged in the last two years, mobile-first strategies drive much of the planning.
At MSU Federal Credit Union, digital channels are the priority for acquisition, but not the whole story. “Digital channels continue to be a priority due to their ability to provide measurable results and targeted reach,” says Maria Presocki, vice president of marketing at MSUFCU. “However, we recognize the importance of traditional media, particularly for brand awareness and community engagement.”
Channel selection also varies by a financial institution’s size and overall strategy. “Banks, like most areas of financial services, are increasingly prioritizing digital advertising over traditional channels,” says Chad Schmidt, vice president and digital advertising specialist at Vested, a marketing and communications agency focused on the financial sector.
“Performance marketing is now the focus. The ability to directly attribute spend to customer actions — whether that’s account sign-ups, mortgage inquiries, or engagement metrics — makes digital the dominant choice.”
Balancing Acquisition and Retention
Banks are under pressure to grow deposits, retain current customers, and improve lifetime value — all without significantly increasing their budgets. That’s forcing marketing teams to make more strategic choices around how much to spend on acquisition vs retention.
For many, acquisition still dominates. “Acquisition marketing comprises most of our budget,” Ryan Barringer, vice president of marketing at Star One Credit Union, tells The Financial Brand. “With membership growth trending down nationally since 2023, combined with persistent misconceptions and/or misunderstandings regarding credit union membership, we continue to invest in creating meaningful awareness in the market to maintain our pipeline of new members.”
How banks split their budgets between acquisition and retention often depends on their size and strategic priorities. According to Schmidt, larger banks tend to focus more on retention and cross-selling opportunities, while smaller institutions are more likely to lean into acquisition using efficient, targeted digital channels to bring in new customers.
Banks are under pressure to drive deposit growth, but it’s become more complex. According to McKinsey, competition for deposits has grown as consumers move funds into higher-yield alternatives. That shift is pushing banks to rethink how they position deposit products, balancing short-term gains with long-term value and retention.
Evolving Local Tactics
Not all advertising dollars are going to digital. Local tactics continue to play a role in how banks reach and retain customers, especially at the community level.
“Half of our new memberships are generated from a branch,” says Barringer. “So, geo-targeting with digital and occasional direct mail, combined with traditional media (when available at the local level), work together to drive activity to a particular branch.”
Presocki sees a similar opportunity. “Proximity-based marketing plays an important role in our strategy, particularly for driving engagement around our branches and strengthening community presence,” she says. “Targeted direct mail, branch geofencing, and local event sponsorships help us reach members and potential members at key moments.”
According to Vericast, direct mail remains one of the top five bank advertising channels. It plays a significant role for banks under $2 billion in assets, ranking alongside digital strategies like paid social and search.
“When powered by first- and third-party data, direct mail is no longer ‘spray and pray.’ It’s now a precision tool for local acquisition and cross-sells,” says Nicholas. “It cuts through digital clutter, can be personalized down to product offers and branch maps, supports compliance for regulated messaging, and drives better results when paired with digital channels like email.”
But cost remains a factor. Not every institution can justify the spend, especially those without a strong branch network or those focused on lower-funnel conversions.
“Physical, location-based advertising tactics can cost significantly more than digital tactics and often sit at the top of the funnel where intent is lowest and ROI is the least clear,” says Schmidt. “This makes it an easy target to eliminate from an advertising plan.”
The Impact of AI and Automation
With budgets under pressure, many banks are leaning on automation and AI tools to extend their marketing capabilities without increasing headcounts or spending.
At MSUFCU, AI and automation play a role in marketing strategy to help maximize ROI. “We leverage predictive models to determine the next best product fit for our members, allowing us to deliver personalized offers and communications at the right time,” Presocki says. “Additionally, we run behavioral and onboarding automated journeys based on member actions, ensuring that our outreach is timely, relevant, and aligned with their financial needs.”
Barringer echoes the shift toward smarter, more scalable execution, noting that the biggest gains from AI so far have come from creative production — writing copy, generating images, and optimizing assets at scale. But more recently, he says, AI is being used to assemble and deliver ad permutations in real time, learning what works and improving performance dynamically. He notes that while these campaigns can have higher CPMs, the returns may justify the costs if marketers have strong insights into their funnel and conversion metrics.
Schmidt sees creative automation as low-hanging fruit for teams getting started. “AI-assisted content creation provides the ability to more effectively personalize content to specific audiences and create variations of that content that can be tested, driving efficiencies for creative teams and leading to performance improvements,” he says. “It provides scale at a team’s fingertips and is relatively easy to layer into an existing process.”
While not every financial institution is fully AI-driven, those adding automation into campaign workflows, targeting, and testing are better equipped to adapt quickly.
Smarter Spending, Stronger Results
In 2025, bank marketers face fewer resources, more complexity, and higher expectations. The brands making the most of their budgets aren’t spending more — they’re spending smarter, using data-driven insights. Whether through personalized targeting, local engagement, or AI-powered message creation, every dollar must drive a meaningful, measurable impact.
Source: THE FINANCIAL BRAND
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