Are BFSI brands going to slash spends on finfluencers?

The recent incident involving Vauld, the Singapore-based crypto exchange brand which suspended all its operations, has left investors perplexed and has also made them question the integrity of financial influencers on whom a majority of them relied upon before putting in their hard-earned money.

The sudden decision by Vauld of shutting its operations as it was facing ‘financial challenges’ has made many investors, most of them GenZ and millennials, question the whole concept of financial influencers and some even calling them out on social media.

Since the brand was promoted by financial influencers like Vivek Srivastava, PR Sundar, Ankur Warikoo, and others on YouTube many youngsters had invested their money in Vauld. 

4 hotshot YT influencers who promoted Vauld in the past

- PR Sundar

- Ankur Warikoo

- Akshat Srivastav

- Booming Bulls

Now you know who not to turn to for investment advice. Hope that the investors get their money back. pic.twitter.com/1yLSRwCWlL

— Azhar.BankFD (@zhr_jafri) July 4, 2022

So, what impact will the incident have on the influencer industry as well as finance brands?  

Pranav Panpalia

According to Pranav Panpalia, founder, OpraahFx, you can never predict the future of a business, and no one could have predicted that a famous brand like Vauld will halt operations.  

Upon being asked if the recent events may result in financial brands cutting down on their expenses on financial influencers, Panpalia said, “It is highly doubtful that brands may pull back on their influencer campaigns. However, what may happen is that people may find it difficult to trust these influencers and what they promote.” 

“Brands will always need influencers to talk about them. Even though there might be a lack of confidence among the audience, influencers are the best way for financial brands to reach the audience. They will continue to do campaigns to maintain visibility but will have to work on winning the audience’s trust,” he added. 

Rasleen Grover, a digital creator making content in the finance space, said, “Since the viewers are holding the YouTubers liable, it would be a challenge for brands to capitalise on influencer marketing. Due to the backlash of this incident, influencers would be more careful with what they are promoting. Brands, as a result, would find it challenging to find influencers who align with their expectations and terms.”

Jay Kapoor

On the other hand, influencer Jay Kapoor said, “I think the brands and the influencers know that this is a temporary phase in the market, when the internet first started thousands of companies shut down. But that phase also gave today’s Facebook and Google. So, I don’t think this in any way would impact the brand’s investments. Brands need distribution and good brands will always find the right people to collaborate with.”

Will influencer incomes be impacted? 

According to industry standards, a well-established urban financial influencer charges Rs 8-9 lakh for a single video and the campaign charges go up to Rs 1 crore. Financial influencers are often seen talking about various investment streams, better alternatives for the audience and how they can predict the market and so advertising expenditure from such brands is also directly related to market conditions. 

As per Panpalia, the current market situation is not great and as a result, many of these brands may pull back on hiring influencers for some time. “In general also, financial influencers will take a hit because the economy is entering recession and financial brands will have a hard hit. At such a time, their spending on marketing will be the least so financial influencers will be impacted,” explained Panpalia. 

Ayush Shukla

Citing similar views, Ayush Shukla, Founder of Finnet Media, stated that brands and finfluencers complement each other. He said both finfluencers and crypto brands have helped each other grow. However, the current market conditions may affect how brands are spending on finfluencers.

"Yes, the budget is slashed due to the market pessimism currently. The government regulations, although very important, have caused hysteria among investors which has led to everyone's panic withdrawing. So more than credibility, the concern is about the current market circumstances," said Shukla.