BFSI AdEx up 1.75X: What’s transforming sector from safe harbour to adventure zone?

"Mutual funds are subject to market risks... read all scheme-related documents carefully.”

This familiar cautionary message defined BFSI (Banking, Financial Services, and Insurance) advertising for decades. Fast forward to today, and the landscape has transformed dramatically.

Banks now promote iPhone deals, insurance companies are innovating with travel partnerships, and mutual funds are running bold campaigns. BFSI advertising has evolved into a dynamic, high-spending sector, now leading AdEx with creative campaigns that go beyond traditional offerings.

The BFS sector has experienced a notable surge in advertising budgets in recent years, particularly following the pandemic. This trend is driven by a confluence of factors, including a pressing need to enhance consumer awareness and education about financial products, increased competition among providers, and the rapid growth of digital platforms—especially in rural markets.

According to the TAM AdEx report for 2023, the ad volumes in the BFSI sector increased by 13% compared to 2022. In print media, the advertising growth for the BFSI sector was even higher, at 15% during the same period. Additionally, ad volumes on radio rose by 13% in 2023 over the previous year. Notably, ad impressions for the BFSI sector saw a significant increase of 40% in 2023 compared to 2022.

Experts shared that as companies strive to engage a diverse audience and establish their brand presence, they are strategically allocating resources across both traditional and digital media channels, underscoring the sector's commitment to capturing new customer segments and fostering long-term loyalty.


Increased ad budgets

According to Navin Kathuria, Executive Vice President, Mudramax, BFSI AdEx has been increasing consistently for the past few years especially post pandemic. The offline spends (TV+Print+Radio) have increased almost 1.75X from approximately Rs 1600 crore in 2019 to Rs 2800 crore in 2023. Kathuria shared that while there is no exact tracking of the spends on digital media, the increase in impressions indicates the rising spends of the sector on the medium. Digital Impressions for the BFSI sector have witnessed a 3.3X steep rise from 2019 to 2023.

According to a TAM report, in 2022, the BFSI sector's digital ad insertions saw a 5% increase compared to 2021. In contrast, during the same period, digital ad impressions experienced a significant rise of 40% in 2023 over 2022. This indicates a growing emphasis on digital engagement, with ad volumes steadily increasing, reflecting the sector's focus on reaching audiences through online platforms.

Over the past year, BFSI clients have notably increased their digital marketing budgets, with some companies reporting a 20-30% year-over-year increase in digital spending, shared Ishank Joshi, MD & CEO, Mobavenue.

 Joshi further added, “This strategic shift reflects a growing emphasis on programmatic advertising, which now accounts for approximately 40-50% of their overall digital spending. The move towards digital channels is driven by the need for precise targeting and measurable outcomes, helping these companies achieve a higher ROI and more agile marketing strategies. In H1 of 2023, programmatic was the leading transaction method for digital advertising in the BFSI sector, with a 61% share.”


Driving factors behind growth

Consumer expectations and preferences have evolved significantly in recent years, driven by factors such as digitalization, increased financial literacy, and a growing emphasis on personalized experiences. Consumers now demand more transparency, convenience, and value from financial products and services. BFSI brands are adapting to these changes by focusing on digital channels, providing personalized recommendations through data analytics, and emphasizing the benefits of financial planning and long-term investments. For example, many banks now offer mobile apps with features like instant transfers, bill payments, and investment advice. Insurance companies are partnering with fintech startups to provide innovative products and services, such as travel insurance with personalized coverage based on individual travel patterns. Mutual fund companies are using social media to educate investors and offer online investment tools. These adaptations demonstrate BFSI brands' commitment to meeting the evolving needs of their customers in a competitive and rapidly changing market.

According to the new Kantar BrandZ Most Valuable Indian Brands Report, Financial Services companies are dominating the charts, with a total of 17 brands, contributing 28% of the ranking's overall brand value. HDFC Bank (No.2; $38.3bn) retains its position as India’s second most valuable brand. State Bank of India (No.5; $18.0bn), ICICI Bank (No.6; $15.6bn) and LIC (No.10; $11.5bn) also feature in the Top 10.

According to Kathuria, penetration and awareness of certain financial categories in India is relatively very low as compared to other countries globally. He said, “The primary step for increasing BFSI AdEx is creating awareness and educating people about financial security and planning and thereby increase penetration of certain financial instruments. In urban India, increasing awareness about the financial sector, growing awareness about financial planning, higher disposable incomes, increasing double income HHs are the factors driving people to consider financial planning as a priority and BFSI companies are leveraging these trends by increasing their advertising budgets.”

Historically, BFSI has been one of the largest categories in terms of spending.

According to Pitch Madison Report 2024, BFSI was the sixth largest category that contributed Rs 534 crore to the overall growth. The growth contribution increased by 24% in 2023 over 2022.

Abhishek Gupta, Chief Marketing Officer, Edelweiss Tokio Life Insurance agreed that the BFSI sector is increasing its share of voice in advertising and marketing spends. In terms of ad impressions—specifically in digital—the BFSI sector saw a significant growth of 40% in 2023 compared to 2022.

“One contributing factor could be the decreasing cost of media due to scale efficiencies. Another major factor is the increase in both the number of spenders and the spending per entity. I anticipate this trend will continue, and we can expect further growth in the coming years,” he said.

Gupta also identified several reasons why the BFSI sector will continue to expand. First, the financialization of savings is shifting investments from traditional bank deposits to newer avenues, with the retirement insurance and mutual fund industries showing a CAGR of 15% over the last decade. Second, the entry of big tech companies, supported by venture capital, will drive increased advertising spends as they seek to establish their brands.

“Additionally, the rise of content marketing allows BFSI firms to effectively explain complex products, and the personalization of financial offerings enables better consumer engagement. Collaborative efforts within the industry also enhance digital advertising impact. Lastly, active regulatory bodies like the IRDAI and RBI are promoting financial inclusion and fraud prevention, further encouraging targeted spending. Together, these factors position the BFSI sector as a dominant force in media expenditures,” said Gupta.


Adding to the above viewpoint, Rakesh Kumar – Founder Square Insurance, shared one of the key trends driving this growth is the rapid rise of digital platforms, especially in rural areas. The fact that India now has over 700 million internet users, with a large portion coming from rural regions, is pushing BFSI companies to invest more in digital campaigns. He said, “As mobile internet penetration grows, people in smaller towns and villages are gaining access to financial services like never before, and that’s where the opportunity lies.”


Competition and market dynamics

According to Sony V. Mathew, VP - Head Branding & Communications, ESAF Small Finance Bank, competition is the primary reason, and the emphasis on continuous customer engagement through digital channels could be another. Mathew said, “Loyalty is no longer just at the end of the funnel; it is now expected to be achieved from the awareness stage.  When everyone strives to build customer loyalty, it is reflected in the budget.”


Kumar shared that in the initial phases, customer acquisition is the key focus. Reaching untapped markets, particularly in rural areas, is bringing the growth. At the same time, there’s a shift towards brand building, especially as financial companies want to earn the trust of these new customers.

“In rural India, trust is everything. People tend to rely on word of mouth and recommendations from known sources. For BFSI companies, building a solid brand presence through consistent, relatable messaging is crucial. We've found that investing in educational content, simple videos, social media posts, and even WhatsApp messages help to build both the brand and the customer base at the same time,” he said
The digital boom in India presents a unique opportunity, particularly in rural regions, where people are more engaged with mobile internet than ever before. This shift is reflected in how BFSI companies, including Square Insurance, are allocating their advertising budgets, focused on reaching and educating these communities, while also building trust for the long term,” added Kumar.

Meanwhile Joshi anticipated that BFSI clients will continue to increase their investment in AI and ML-driven technologies, with projections suggesting a 30-40% growth in digital marketing budgets over the next two years. He said, “Programmatic advertising, in particular, is expected to see a 25% annual growth, driven by its ability to enable precise targeting, predictive analytics, and personalized marketing. Additionally, spending on omnichannel programmatic mediums such as Connected TV (CTV) and Digital Out-of-Home (DOOH) is predicted to grow by 20-30% as these channels gain broader reach across multiple tiers in the country.”



Spends on media

Mathew shared that digital spending is on the rise for the sector, but traditional channels remain equally important for the BFSI segment, especially when targeting middle-aged women and senior citizens. “Both have a mix, and it varies from company to company. I feel that there should be an ideal mix of 50:50 or 60;40 balance between performance and brand building through digital channels. Maybe it depends on the priority of the organisation based on their business plans.”

According to Joshi, Traditionally, about 50-60% of the digital budget was allocated to walled gardens, such as social platforms and performance marketing. “However, there has been a significant shift, with programmatic advertising now comprising 40-50% of the total digital spending. BFSI clients are increasingly investing in AI and ML-powered technologies, which have resulted in a 20% improvement in targeting efficiency. Key objectives include increasing brand awareness by 15-25%, acquiring high-intent audiences, and achieving a 10-15% increase in customer retention,” said Joshi.