How Financial Influencers are Reshaping Personal Finance

Social media platforms, such as TikTok and Instagram, have allowed for influencers and influencer culture to rise to the forefront of digital marketing. Consumers now look to influencers for advice and recommendations, and value the information that they hear. In fact, 69 percent of consumers feel confident in influencer recommendations, making influencer support a powerful marketing tool. The rise of influencer trust has extended beyond just retail advice and dinner ideas, with many consumers now turning to social media for their financial advice. 79 percent of millennials and Gen Z have seeked financial advice from social media, making way for the rise of financial influencers, or “finfluencers.”

What are “Finfluencers” and Why Are They Trusted?

Financial influencers, or “finfluencers,” cover everything from saving hacks to investing tips to personal finance hacks. By leveraging social media, these influencers are able to share financial information in a free, engaging and digestible way to a wide audience. In the past, financial advice has not always been as easy to find and available as it is today with social media, and finfluencers have opened up opportunities for consumers to easily access this information and take charge of their finances.

Younger consumers, such as Gen Z, are also growing more cautious of traditional advertising. Around 41 percent of Gen Z trusts influencers more than a traditional advertisement from a business. Finfluencers offer a more authentic experience, sometimes sharing personal financial mistakes and experiences with their audience, making their advice seem more real and relatable. For financial institutions, leveraging this humanized and relatable approach is an extremely effective marketing tool.

How to Leverage the Power of Finfluencers

Financial institutions that are able to effectively leverage the rising popularity of influencers are unlocking a powerful marketing strategy, reaching audiences in a more relatable way than ever before. There are several key points for financial institutions to keep in mind.

• Understanding What to Advertise: While finfluencers cover many different financial topics, financial institutions should consider high engagement topics that directly connect to their services. For example, Coamerica Bank, located in Dallas, TX, partnered with a Dallas-based influencer to advertise their new CoWorkSpaces program. Coamerica leveraged the social media following of @awesomejulie in order to reach a broader audience, and engage with small businesses in a more authentic way.
• The Power of Social Media: There are several main ways to reach users interested in financial topics on social media, including TikTok, Instagram, and YouTube. On TikTok, the thread #fintok has gained over 4.7 billion global views, with users searching for videos under this hashtag for their financial advice and education. Users like Graham Stephan and Patricia Bright have built large communities on YouTube, with Bright’s focusing on female financial empowerment to her over 450,000 subscribers. CapitolOne turned to Instagram finfluencers, Talaat and Tai McNeely, to educate users on how to manage credit. As users are already engaging with finances on these platforms, these are important resources for leveraging finfluencers’ power and social media audience.
• Leveraging Micro-Finfluencers: While some of the more popular finfluencers may be harder to reach or more expensive to partner with, banks should consider looking for more micro influencers on these platforms. Micro Influencers have anywhere from 1,000-100,000 followers on their respective platforms, and typically see high engagement from their followers. Micro influencers typically have a tighter knit audience, meaning their followers take their advice more seriously due to the closer relationship. Since micro influencers also charge less than big name influencers, this is an affordable and effective way for financial institutions to ease into the influencer marketing world.

What to Considering When Partnering With Finfluencers

For financial institutions that are interesting in begining a partnership with a finfluencer, there are a few things to consider.

• Compliance and Regulations: In order to stay in line with financial regulations and compliance restrictions, ensure that your chosen finfluencer is accurately representing the financial information, including any possible risks that could arise. Bad or inaccurately portrayed information is not only bad for the brand, but could lead to unwanted legal issues for misrepresentation of services. Additionally, make sure that your finfluencer clearly discloses that their post is an ad, such as by including #ad or #sponsorship beneath their caption.
• Review and Monitor Posts: Since finfluencers typically do not have a formal education in finances, or the legalities of finances, it is important to review and monitor posts. Although not intentional, it is possible that a finfluencer may misrepresent a financial service, or oversimplify a more complex and risky financial opportunity. Carefully reviewing posts prior to launch, and monitoring comments and feedback after posting can ensure your financial institution is not accidentally misleading consumers.

With these things in mind, financial institutions can ensure that their partnership with finfluencers is transparent, honest, and compliant to financial regulations.

The rise of finfluencers open up a unique opportunity for financial institutions. Their wide and trusting following, relatable content and humanized advertising approach has led social media users to actively seek out new recommendations and advice from them. While compliance and regulations remain crucial, financial institutions who are able to leverage this power stand to unlock significant marketing potential.

For more financial tips and marketing strategies, check out our other articles here.

The information provided in this blog is for informational purposes only and should not be considered financial advice. HIFI is a marketing agency and not a licensed financial advisor. Always consult with a qualified financial advisor or professional before making any financial decisions. HIFI is not responsible for any financial decisions made based on the content of this blog.