Bank Marketing Budgets Rebound in 2025, But Fintechs Continue to Dominate Spend

Does your financial institution make a substantial commitment to marketing, or does it simply allocate the bare minimum? More importantly, is that investment delivering the expected returns?

In the initial part of a comprehensive series, we delve into how much banks are truly dedicating to marketing relative to their overall budgets and assets. Our analysis highlights a significant rebound in marketing investment projected for 2025 and scrutinizes how traditional banks measure up against their fintech rivals purely on spending.

For the first time in this annual assessment, we’ve also incorporated data from banks that report marketing expenses to the Securities and Exchange Commission (SEC). This addition provides valuable insights from institutions not typically covered by federal bank regulators’ call report instructions for marketing expenses.

The subsequent installment of this series will explore the direct impact of marketing investment on performance, specifically correlating spending levels with growth in loans, deposits, and revenue. A forthcoming companion report will also examine these same factors within the credit union sector.

Key Insights from the Analysis:

• Marketing investment is gaining momentum across the banking industry, yet the disparity between conventional banks and fintech competitors continues to grow.
• In 2025, marketing spend witnessed a significant resurgence among both small and midsize banks, reversing the deceleration observed in previous years.
• Despite this growth, marketing still constitutes a relatively modest portion of overall bank expenses.
• Our findings reveal that fintech bank holding companies possess a distinct competitive advantage, largely due to their substantially higher marketing expenditures.

Understanding the Analysis Methodology

This article presents the core findings of an extensive analysis conducted by Capital Performance Group (CPG) in collaboration with The Financial Brand.

The study focused on the marketing budgets of FDIC-insured institutions, categorized into two asset tiers: those with $1 billion to $10 billion in assets, and those ranging from over $10 billion to $100 billion. The analysis utilized 2025 year-end call report data, providing year-over-year comparisons with 2024 figures. To ensure a consistent definition of marketing expense, CPG’s analysis relied on data from the Federal Deposit Insurance Corp., specifically using the annual “advertising and marketing expenses” item found in call reports.

It’s important to note that not all marketing-related costs are included in this specific line item. For instance, salaries for marketing personnel are excluded, while direct marketing, advertising campaigns, and promotional spending are covered.

CPG’s analysis also tracked a distinct peer group of fintech bank holding companies, comprising 11 publicly traded, direct-to-consumer fintech entities.

Banks are only mandated to submit information for the “advertising and marketing expenses” line item in their year-end call report if these expenditures total $100,000 or more and if they exceed 7% of total “other noninterest expenses.” For institutions that did not meet this threshold for call report disclosure but did report Advertising Expense in SEC filings, the SEC-reported marketing expense was used. Under generally accepted accounting principles, advertising costs encompass all activities designed to promote an entity’s products, services, or brand to the public.

Evaluating Bank Marketing Budget Sizes in 2025

CPG’s initial step involved assessing the scale of bank marketing budgets by examining marketing expense as a percentage of the bank’s total noninterest expense. This metric illustrates the significance of marketing relative to the bank’s overall operational budget. Additionally, the study calculated marketing budgets as a percentage of average assets, offering banks a valuable benchmark against similar institutions and operational models.

Typically, smaller banks (those with assets between $1 billion and $10 billion) allocate approximately 2.5% of their noninterest expense budgets to marketing, which equates to 6 basis points of their total assets. Midsize banks (with assets over $10 billion to $100 billion) tend to spend slightly less, dedicating 2.35% of their noninterest expense budget and 5 basis points of assets to marketing.

Marketing Budgets Witness a Strong Rebound in 2025

Following several years of restrained growth, bank marketing budgets staged a significant comeback in 2025. Both asset groups observed an increase in marketing expense as a percentage of total assets and noninterest expense year-over-year, and critically, the pace of this growth accelerated markedly.

Smaller banks (with $1 billion–$10 billion in assets) expanded their marketing budgets by 7.16% in 2025. Midsize banks (over $10 billion–$100 billion) demonstrated even more robust growth, posting a 10.15% increase.

Key Trend: Both these figures represent a substantial reversal from the decelerating growth trends of prior years, marking the highest levels of marketing investment growth recorded over the past five years.

This resurgence likely stems from a confluence of factors, including:

• Increased competitive pressure from digital banking platforms.
• A post-pandemic normalization of customer acquisition costs.
• A growing recognition among bank leadership that marketing is a crucial revenue-generating function, not merely a discretionary expense.

As competition for deposits intensified and loan growth slowed in various markets, banks appear to have proactively increased marketing efforts rather than scaling back.

Reality Check: Despite this rebound, marketing remains a comparatively modest line item, accounting for around 2.5% of noninterest expense for smaller banks and 2.35% for midsize institutions.

Competing with Fintechs: An Imbalanced Spending Landscape

CPG also conducted a comparison of marketing spend between traditional banks and a select group of direct-to-consumer fintech bank holding companies (11 institutions). This comparison provides a consistent view of marketing spend trends across these distinct groups. The reporting requirements for these fintech bank holding companies are identical to those of conventional banks.

These fintech holding companies generally possessed much larger average assets ($130.5 billion) compared to the other bank asset tiers. Crucially, they do not rely on a physical branch network or traditional distribution channels (with a median of just three branches) to maintain and expand their businesses. Furthermore, many of these fintech bank holding companies operate business models heavily centered on consumer lending and credit cards.

Key Insight: While traditional banks are indeed boosting their marketing investments, fintech competitors continue to operate on a fundamentally different scale. This trend underscores both the critical importance of marketing and the formidable challenge of competing solely on marketing spend when facing the deep pockets of these digital giants.

Fintech bank holding companies allocate significantly more of their budgets to marketing, dedicating 8.45% of noninterest expense, which starkly contrasts with percentages below 2.5% for all traditional banks examined. Moreover, these fintechs expanded their marketing budgets at twice the rate of their smaller bank peers.

Marketing’s Evolving Strategic Importance

Marketing, while still representing a relatively small proportion of total expenses—approximately 2.3%–2.5% of noninterest expense and 5–6 basis points of assets among the studied bank groups—is undeniably growing in strategic importance.

After a period of decelerated growth, 2025 marked a clear resurgence in marketing investment across both community and midsize banks. This signals renewed confidence in marketing as a vital competitive lever.

Strategic Challenge: However, the expenditure gap between traditional banks and their fintech competitors remains substantial. Fintech bank holding companies commit more than three times the share of their budgets to marketing, and they accelerated their budget growth even faster in 2025. For traditional banks, this highlights a persistent challenge: effectively competing for customers in an environment where digitally native brands operate with fundamentally different investment capacities.

A Caveat: What these benchmarks cannot definitively tell us is whether increased spending automatically translates to superior outcomes—that intricate relationship will be thoroughly explored in Part 2 of this series. What benchmarks do offer is a clear indication of industry trends and how your institution compares within the broader landscape.

Benchmarking should always be interpreted within its proper context. Factors such as diverse business models, varying line-of-business mixes, distinct geographic focuses, and unique growth strategies can all materially influence what constitutes “good” performance. While high-level comparisons provide a useful starting point, institutions should conduct deeper analyses to understand the specific drivers behind peer performance before establishing their own marketing targets.

For detailed information about the study and access to the complete dataset, please contact Ally Akins at [email protected].

Source: Thefinancialbrand.com