In November 2022, the Securities and Exchange Board of India (SEBI) revealed that it was working on guidelines for financial influencers, or finfluencers, giving unsolicited financial advice on social media platforms. Their numbers have only grown since then, even as crackdowns on some manipulating stock prices using social media are a reality.
We asked practitioners from the marketing, BFSI and influencer marketing spaces if the deluge of finfluencers – of all kinds – is eroding the overall credibility of influencers when it comes to financial services.
‘Indiscriminate endorsement can be a death knell’
I think we’re confusing alleged popularity with credibility and trust.
As brand managers at hoaried financial institutions can attest, earning and building the trust of your audience is an arduous task, one that takes years, even decades. And the slightest misstep can derail such trust, even overnight.
The real issue for them is not that there’s a deluge of their kind. That’s probably a good thing, actually. But when finfluencers are indiscriminate about who and what they endorse, discerning audiences will inevitably get their guard up. And that can be a death knell for them.
– Karthi Marshan, Former CMO, Kotak
‘How can everyone be an expert?’
Credibility and trust are the most important assets and valuable properties of any brand or company. For that to be protected and enhanced, it is important that credible experts opine. If all and sundry start being experts and giving opinions and advice, the larger the numbers, the lower the trust. How can everyone be an expert? How can everyone try to influence? It looks suspect. One believes a ‘Specialist’ not a ‘long list’. Influencers or finfluencers have to be selective, not mass, otherwise the entire category will be disbelieved.
– Jagdeep Kapoor, Founder, Chairman and Managing Director, Samsika Marketing Consultants
‘Finfluencers fill gaping void in financial education’
When you weigh the gains against the losses, the answer favours finfluencers. Yes, there’s a dangerous detritus of finance creators who neither have the knowledge nor the skill to educate others, but that number is sorely limited.
Most of them have the know-how to provide grounded, sage information on personal finance. They simply sprinkle some glitz on an otherwise unimaginative and monotonous topic, which piques the interest of viewers.
Bear in mind that money has always been a sensitive topic, especially for Indian consumers. We have a generational, unconscious bias and don’t talk about it openly. However, among Millennials and Gen Z, the desire to take control of finances has skyrocketed, so they’re turning to social media.
56pc of the cohort intentionally seeks out financial advice through social platforms (Qualtrics and Credit Karma study). Finfluencers fill the gaping void in financial education, and that is part of the problem. People prefer advice from a voice like theirs – the average Joe or Jane– rather than seeking the advice of an expert.
Managing finances is a nuanced subject; packaging it in a Reel, Short, or a Twitter thread is not easy, by any means. Even if a creator has the best of intentions, there just isn’t enough space and time to list down all the risks involved. Additionally, a lot of creators are ordinary people who are simply sharing their experience of investing and saving. They don’t set out to give investment advice.
Finally, finance creators are not solely culpable for the erosion of credibility. Financial players and consumers play a hand too. It’s incumbent upon financial service providers and fintechs to thoroughly vet any content before it is pushed live during influencer marketing campaigns. And that creators include paid or sponsored promotion disclosures in their content.
On the consumer front, they need to understand that finfluencer content has to be a jumping-off point for their own research. Further, popularity does not imply sound advice, so they have to approach any financial advice content with a healthy dose of scepticism.
– Ankit Agarwal, CEO & Founder, Do Your Thng
‘A crowded market can lead to saturation of unqualified individuals’
It depends on one’s perspective. The state of financial literacy in India is relatively much lower as compared to the advanced economies and among the top five major emerging economies.
As per a recent survey conducted by National Centre for Financial Education, India is at 35pc as against 60pc-plus in the advanced economies.
So a large number of financial influencers can be beneficial as it can increase awareness and accessibility to financial education and advice for a wider audience. It also leverages the platforms natively and is busting myths of financial literacy being boring in the otherwise conventional approach.
However, we need to understand the pedigree of these influencers. Influencers were winners because they brought an unique advantage of being a Key Opinion Leader (KOL), as against Brand Ambassadors. KOLs meant expert and experienced in the field that the influencer was expressing their opinion about.
While this is easier done in fields like shopping, gadgets, lifestyle etc., finance is certainly a niche. A crowded market can lead to a saturation of unqualified or unreliable individuals offering financial advice, which can be detrimental to individuals who rely on that information. Additionally, it could lead to more noise and less signal, making it more difficult for individuals to distinguish between credible and non-credible sources of financial advice.
– Jahid Ahmed, Sr. VP and Head of Digital Acquisition, Website, Content & Social Media Marketing, HDFC Bank
‘Not all financial advice should be taken at face value’
The demand of financial influencers or “finfluencers” as they are popularly referred to, grew by leaps and bounds since the lockdown, as it gave people the space and time to assess their personal finances and taught them the importance of judicious financial planning. They needed an outlet to learn about finance, which often business channels which only limit their programming to providing market updates do not deliver. Finfluencers break down head-scratching complex subject matters into easy-to-grasp and easily digestible content which is both informative and entertaining.
Given how rampant financial illiteracy is in India, it is not surprising how quickly audiences latch on to these online personalities for both financial advice and entertainment value. But the question of the hour is, are they trustworthy? I would say yes, but only if you proceed with caution. Finfluencers can be a great source of information but it is important to note that not all financial advice should be taken at face value. It is always advisable to take any financial decision with prior due diligence and the same scrutiny as any other major life decision. Especially, don’t trust those that promise a ‘get rich overnight’ scheme or use clickbait titles. I believe now that SEBI has shown interest in regulating finfluencers, their content is only going to become more credible and rooted in financial knowledge. Even with ASCI guidelines now mandating full sponsorship disclosures, people will be able to decipher who are and aren’t influencing for the right reasons and make influencer marketing in fintech an awareness first channel.
– Ritesh Ujjwal, Co-Founder and CEO, Kofluence