UK fintechs must keep their social media marketing, particularly regarding the use of influencers, in line with Financial Conduct Authority (FCA) guidelines.
The UK’s financial regulator has issued a warning to fintechs on how social media advertising should be conducted. Firms have been reminded to ensure ads are fair, clear and not misleading.
Like numerous other business segments, fintech makes extensive use of social media for marketing purposes. Influencers have become increasingly important to this due to the vast social media following these firms have.
Financial markets are often volatile sectors, and with fintech being home to numerous UK startups it has increasingly become an investment target. Payments companies were big investment magnets for some time, now AI companies are the big draw according to some.
Against this backdrop, the FCA has warned fintechs, and influencers that may be partnered with such firms, that it will pursue legal action if advertising standards are breached. Firms must ensure consumers’ financial decisions are well informed, the regulator asserts.
Lucy Castledine, Director of Consumer Investments at the FCA, said: “Any marketing for financial products must be fair, clear and not misleading so consumers can invest, save or borrow with confidence.
“Promotions aren’t just about the likes, they’re about the law. We will take action against those touting financial products illegally.”
Regarding influencers, the FCA has warned that these social media personalities promote financial products which it has approved. Doing so without the FCA’s approval could be a criminal offence.
The regulator explained that “consumers need to be alert to dubious adverts and scams online, but it is important that influencers ensure they’re on the right side of the rules and consider what would happen to their own reputations if they’re found to promote products illegally”.
Advertising crypto assets has become a popular source of income for some influencers, whether this be encouraging investment in a certain coin or use of a particular crypto exchange platform.
Given the volatile nature of crypto markets and the numerous recent scandals in the sector – such as the collapse of FTX and legal cases against Binance – some regulators have been stepping up monitoring and scrutiny of the sector.
Whilst the FCA has not specifically singled out crypto influencers, instead focusing more broadly on fintech-partnered influencers, it would be hardly surprising if the former have fallen under its regulatory gaze.
