Fintech and Influencers: What are the rules around using influencers for financial advertising?

Several digital banks, including Revolut,N26 and Starling, use influencers to promote their products, but what are the rules surrounding this type of advertisement?

For instance, N26 has used stars from Made in Chelseato promote their now soon-to-be-defunct UK offering and Revolut has used former Love Island contestants to promote its premium account offerings.

Aside from social media, digital banks are also being advertised widely on YouTube in review videos through review videos that promote both their free and premium services.

Both N26 and Revolut also appear to be, at the very least, providing affiliate links so that both Revolut and the influencer can make money off referrals through viewers using their codes and links-, most of the videos seem to centre around the benefits of their premium offerings, with some of the videos garnering hundreds of thousands of reviews.

Monzo again appears to have taken somewhat of a step back from paying influencers for promotion, however, some of the review videos posted to YouTube do appear to still have affiliate links despite Monzo stopping its ‘Golden Ticket’ cash referral scheme.

What are the rules surrounding influencer advertising?

The Advertising Standards Agency (ASA) has some guidelines on their website about how influencers must label their paid posts, but nothing specifically on the promotion of financial services.

As a minimum, the rules state influencers must clearly use #ad on any post that they have received payment for, or receive a commission from, although this often isn’t done in practice.

A spokesperson for the ASA told AltFi: “Influencers are allowed to promote products on social media as long as the post is obviously identifiable as an ad and ‘socially responsible’.”

“Influencers should take into account the demographics of their followers, as certain products, such as alcohol and gambling, cannot be advertised directly to under 18s, although this rule does not apply directly to the promotion of financial services/ products.”

When asked if it had received any complaints about influencers promoting digital banks, the ASA said it had only received one complaint about a digital bank. The complaint was in relation to an influencer not correctly labelling an affiliate link for an N26 ‘refer a friend code’ on Instagram. 

Similarly, AltFi got in contact with the Financial Conduct Authority (FCA) to see if it had received any complaints regarding fintechs using influencers for advertising, but they declined to confirm how many complaints, if any, it had received.

An AltFi Instagram investigation

An AltFi analysis of recent social media posts found that on Instagram there are 10.3k posts tagged as #revolut, 10.4k posts tagged as #monzo, 11.6k as #n26 and Curve was trailing behind with just over 500 posts.

There were also over 1,000 posts tagged as #starlingbank, however, there were also several posts tagged as #starling which unfortunately was largely dominated by bird pictures making it difficult to gauge just how many posts can be attributed to the bank and how many are dedicated to the small bird.

On their websites, digital banks such as Revolut, advertise the chance to become influencers, or Pioneers, for them.

Monzo also scrapped its ‘Golden Ticket’ scheme that “rewarded bloggers and influencers, or ‘Ambassadors’, who spread the word about Monzo via their website or social media”, as well as its £5 ‘refer a friend’ scheme.  

When asked about the removal of their ambassador programme, Monzo told AltFi that it was “it was too long ago” for it to remember the reason behind the programme’s closure. 

Similarly, Starling appears to have removed information surrounding its influencer programme as it has moved into the realm of TV advertising instead.

But do influencers actually know what they’re promoting?

On a quick trawl through Instagram to see what influencers are promoting, it is apparent that on the most part, they promote beauty products and clothing brands rather than financial services. 

This begs the question: Are brands and influencers doing their due diligence when choosing who to promote and what they’re promoting?

Helen Saxon, banking editor of MoneySavingExpert.com, told AltFi: “In an ideal world, influencers would only promote brands, accounts and products that they use, love, and really believe in.” 

“But, because social media allows you to only let people see what you want them to see, you can never be 100% sure of the truth.”

“Always do your own research and make sure that if you’re signing up to a new bank account or a new credit card that you know all the pros and cons and that you’ve made your own decision about whether it’s right for you,” she added.

On the other hand, using influencers gives digital finance brands the opportunity to reach much wider audiences than they would be able to with traditional advertising techniques. 

Ian Leslie, a communication strategist who specialises in financial brands, told AltFi: “Influencers are helping to bridge the emotion gap between brands and consumers. They can help consumers connect in more intimate and emotionally varied ways with financial products and services.”

“They're not a replacement for conventional advertising, which is necessary to build reach and fame. But they can deepen the brand's relationship with its audience.”

Regulation: The Wild West of influencer advertising

Essentially, there is absolutely no regulation for banks or fintechs surrounding the use of influencers to promote digital services, brands, and the influencers they chose to use, just have to use their due diligence and make responsible decisions, and of course ensure they label any posts as #ad.

The regulation, or lack thereof, surrounding digital banks using influencers to promote their products is somewhat alarming considering the vast majority of their customer base is young people. 

The ASA at present seems to be most concerned with influencers labelling advertisements as such and not what they are actually promoting. 

Neither the ASA or the Financial Conduct Authority appear to want to talk to each other in order to regulate the use of influencers for promoting digital banks, they’d rather leave the area as blurred as possible to pass on the responsibility to one another.