How financial services marketers should respond to new Facebook regulations

It’s fair to say that Facebook and other social media platforms have not been having the best few years when it comes to consumer privacy and fairness.

Facebook in particular has been the subject of several legal complaints:

  • The National Fair Housing Alliance sued Facebook for making it possible to block individuals from viewing housing-related ads on the platform based on their race.
  • The Department of Housing and Urban Development followed suit with a similar complaint.
  • The ACLU – alongside many other organizations – filed charges with the Equal Employment Opportunity Commission against Facebook for allowing recruiters to display job openings only to younger men, excluding women and non-binary individuals and older males.

As a result of this and other legal actions, Facebook made a significant change to its marketing platform by barring companies that specialize in housing, recruiting or finance from targeting certain audiences or using certain marketing tools.

What is the fallout for financial brands?

The Equal Credit Opportunity Act (ECOA) prohibits creditors from using information about race, color, religion, national origin, sex, marital status, age or the receipt of public assistance to determine eligibility for credit.  

Facebook now prevents banks and credit unions from targeting audiences for credit-related products using these characteristics. Marketers for these companies can no longer use the “lookalike audiences” tool to exclude these audiences as well.

Because of these restrictions, Facebook has basically become a cheaper version of television — marketers can buy lots of low-cost ads that reach a large audience, but they have little granular control over who receives those ads. 

With these changes, Facebook can no longer provide marketers access to reach their known, desired audiences. 

How to scale the garden walls

Facebook is a well-known walled garden; they have lots of information on the people that use their platform, but you can only use it to power advertising on Facebook.

Walled gardens, by design, make it difficult for advertisers to connect consumer data across digital platforms and enrich their first-party data with cross-channel transactional and behavioral data at scale. This lack of transparency is crippling for advertisers, who want to know—with certainty—who they are actually reaching. And with the new regulations on Facebook, that picture only becomes fuzzier for advertisers on their platform. 

Frankly, this is a problem in digital marketing for financial services outside of Facebook as well. Financial marketers are hamstrung by efforts to segment and target their audience due to a complex regulatory and compliance framework. In a recent study from Forrester Consulting commissioned by Epsilon-Conversant, Forrester found that accuracy (or how well marketers are able to reach the people they intend to target) was the #1 challenge for financial services marketers in regards to their identity resolution program. 

Financial brands must find a way to accurately and persistently identify consumers as they move through their financial lifecycle without using prohibited class information or information that mimics prohibited classes.

A robust identity resolution program gives financial brands first-party data enriched with third-party data insights in an environment designed to help financial marketers remain ECOA-compliant. This data can be activated across multiple channels enabling brands to deliver timely, personalized ads in an omnichannel environment.

Download the Forrester Consulting research


In the financial services industry, identity resolution is a strategic asset that links interactions to specific individuals, eliminating duplication and wasted ad spend. Financial brands have used identity management for years to comply with anti-fraud policies, but they've been slow to implement identity technology in a strategic way to deliver marketing messages.

In a marketing context, identity resolution bypasses walled gardens and their lack of transparency, providing a closed loop for analytics and attribution. It enables precise targeting and segmentation without relying on protected classes for modeling — or even using them as inputs.

Brands who get identity right can aggressively compete for high-value customers. Identity, when combined with deep consumer knowledge and real-time activation, gives financial brands a strategic edge for acquisition, growth and retention while simultaneously reducing duplicative efforts and inefficient ad spend.

If the Facebook changes result in marketers shifting dollars to solutions that are both accurate and compliant, it’s a win for consumers and financial brands.

Should financial services marketers end their reliance on Facebook?

This isn't the first time that Facebook has come under fire for issues related to understanding who advertisers are reaching and measuring the effectiveness fo that spend. 

Because of Facebook’s control over its data and metrics, the platform has endured considerable controversy over allegations that it has misrepresented audience engagement metrics in the past. For example, yet another Facebook lawsuit alleges that the social media company exaggerated the average length of a video view by up to 900 percent.

Even if this accusation is found to be incorrect, it is no secret that the platform has been dogged about questions of transparency and an inability to verify important KPIs.

Facebook and similar walled gardens have always been problematic for marketers. In addition to the problems above, marketers are hampered by their inability to correlate first-party data from these platforms with information from other channels.

Brands' ability to target customers on Facebook has always been restricted—and these newest restrictions provide you with an opportunity to leave the platform behind.

Interested in learning more about how to connect audiences in an accurate and compliant way? Download our guide: How to build a lifetime of financial loyalty—Digital marketing for all 5 stages of the customer lifecycle.