US ad spend with financial media will reach over $600 million this year, according to an EMARKETER forecast, but still represent a small fraction of the commerce media landscape.

"This is a really nascent space. There aren't many players that make up this cohort of financial media networks (FMNs), and they represent a really diverse array of types of financial companies," said our analyst Sarah Marzano during a recent episode of "Behind the Numbers."

As the commerce media space evolves, here are the major challenges and opportunities facing financial media networks.

Financial institutions have unmatched consumer data

Despite their relatively small market share, financial media networks offer advertisers access to transaction data that provides unprecedented visibility into consumer behavior across merchants.

"From a data standpoint, in terms of the depth and variety of data that they sit on, the picture that they can paint of their users is pretty unparalleled," said our analyst Max Willens. "Even Amazon, which sells one of almost everything, can't provide full visibility into the things the person does to entertain themselves, where they go when they travel, what kinds of coffee they get in the morning."

This cross-merchant visibility creates unique targeting opportunities for retailers seeking to reach competitors' customers.

• "If you're Nordstrom and you want to make sure you're getting in front of someone who's a regular Macy's shopper but doesn't shop with you, that's an exciting opportunity that financial media networks can provide," said Marzano.

Consumer intent remains a significant hurdle

Despite their data advantages, financial media networks face fundamental challenges in driving conversions compared to retail media networks.

The biggest barrier is consumer mindset.

• While retail media thrives on reaching active shoppers, financial apps and websites typically aren't opened with purchase intent.
• "If you think about why you're opening up your credit card app, it's probably not with shopping in mind," Marzano said. "It increases the necessity of creating offers that feel so personalized that it drives someone to take an action that they weren't necessarily planning on taking."

This challenge is reflected in consumer perceptions, with only 22% of consumers saying their bank can anticipate their needs, per an October 2024 PYMNTS study. Financial institutions must overcome this perception gap to drive meaningful engagement with advertising offers.

Scale will determine which players succeed

The financial media network landscape will likely remain dominated by major financial institutions with sufficient scale and technological capabilities.

• Major players include Chase with their Chase Media Network, payment providers like PayPal, and buy-now-pay-later services like Klarna.
• These companies have the scale and resources to invest in the technology and partnerships needed to monetize their data effectively.

Smaller institutions might eventually band together to create joint networks, though data portability and regulatory compliance present significant hurdles.

"I think [joint networks are] possible. I think that it's going to hinge on the data portability and the way that they can safely do this considering they're dealing with data that's highly regulated and pretty sensitive in nature," Marzano said.

Innovation could accelerate growth

While financial media networks face significant challenges, innovative approaches could accelerate their growth and importance in the commerce media landscape.

• For example, PayPal is working directly with merchant partners to secure ad inventory on retailer websites.
• "PayPal has announced some really interesting initiatives to actually work directly with their merchant partners to secure ad inventory on retailer and merchant websites," Marzano said. "I think that sort of marriage of being able to secure really valuable inventory on websites where we know it works quite well, is a really exciting opportunity."

Other potential innovations include developing commerce-oriented experiences in financial apps and AI-powered shopping assistants leveraging financial data for personalized recommendations.

However, Marzano expressed skepticism about fully autonomous shopping solutions in the near term, noting that "it is very easy for something to go wrong in a way that erodes trust."

Listen to the full episode

This was originally featured in the Commerce Media Weekly newsletter. For more marketing insights, statistics, and trends, subscribe here.