Building brand trust in influencer marketing

As the FCA undertakes a deep dive into financial influencers, brands seek clarity on how to utilise influencer marketing while keeping on the right side of the watchdog.

Individuals offering financial recommendations through social media have caught the attention of financial regulators in the UK, Europe, and the US throughout 2023.

Financial influencers, or “finfluencers” as they’ve more commonly become known, have become heavily associated with cryptocurrency and credit products in the B2C space.

According to a poll of UK 18–29-year-olds for MRM’s Young Money Report 2022, 90% of those surveyed said they have acted on information offered up by finfluencers on social media.

The regulators have been taking a greater interest in these digital marketers because of the accuracy of their recommendations, the potential for consumer harm, and because of how influencers traditionally earn their money.

For example, B2C influencers have traditionally earned revenue through brand collaborations, advertisements, and pay-per-view compensation from streaming platforms.

However, recent years have seen a shift towards “organic” influencers where individuals who are already established in an industry or company have a different incentive – reputational growth, not money.

Regulatory press

In July, the UK’s Financial Conduct Authority (FCA) launched a consultation to crack down on financial promotions on social media.

The regulator said that social media has become an increasingly vital part of firms’ marketing strategies, helping them reach a large audience at speed.

“While this has helped firms communicate with consumers more effectively, poor quality financial promotions on social media can lead to significant consumer harm due to their wide reach and the complex nature of financial services,” the report said.

The notice of new guidance – which hasn’t been updated since the very different landscape of 2015 – and its looming publication has elicited a sense of caution among firms.

The FCA is working on the regulations with organisations such as the Influencer Marketing Trade Body (IMTB), a not-for-profit membership organisation working with agencies to build a robust and sustainable future for influencer marketing.

Recounting his journalistic career, Mark Geoghegan, host of The Voice of Insurance Podcast, explained how technical requirements for competence have effectively been eroded in recent years as a result of the mass expansion of social media outputs.

While working as the editor of a magazine recommending stocks and shares, Geoghegan had been required to become FSA (now the FCA and PRA) approved.

“That was just around the time of the Financial Services and Markets Act of 2000, the big bang of insurance. I had to do stockbroker exams because my name would be on the financial promotion for the magazine,” he recalls. “I had to become a stockbroker effectively.”

Looking at present-day financial influencers, Geoghegan predicts that the way influencers behave, how they’re incentivised, and how they declare their interests will need some kind of intervention in the near future.

Brands wanting to reach their target audience have to do so through social media and, increasingly, through a content creator, says Scott Guthrie, director general at IMTB.

“We no longer have blind trust in brands, or in institutions, now entities have to earn our trust. However, we do trust people like us – and we treat influencers as people like us.”

In B2C marketing, brand collaborations make up 70–80% of influencer revenue, says Guthrie, whereas B2B influencers are almost purely focussed on establishing expertise and their personal brand.

“B2B marketers may be motivated by becoming more influential within their niche. It’s possible that rather than being driven by renumeration they’d prefer to have advance sight of a product or service,” adds Guthrie.

Podcaster and former (re)insurance journalist and broker, Mark Geoghegan is in many ways the ultimate insurance “finfluencer.”

Winning hearts and minds

Though Geoghegan doesn’t set out to be an influencer, his influence over the (re)insurance market is undeniably an organic byproduct of what he does.

“I think you can only influence people – really influence people – when they know that you know as much as they do, or more than they do, or they know that you’ve spent 18 years talking to everybody in the industry,” Geoghegan says.

B2B influencing is about demonstrating that you understand and, more importantly, care about the industry, says Geoghegan.

Having established his own brand, companies use Geoghegan’s brand equity to elevate their own.
His podcasts sponsors are “associating themselves with the journalism rather than with the influence. The influence comes from having their brand recognition alongside mine,” says Geoghegan.

Once a platform for networking and job hunting, LinkedIn has become a powerful communication tool for employees to promote their professional and personal brands.

Employee advocacy is a powerful subsection of B2B influencer marketing, says Guthrie, and companies should help colleagues share their voice as subject-matter experts.

“The time has gone where employees just repost their company’s marketing on LinkedIn. The enlightened employees hold their own communities on LinkedIn. They translate the key messages from their companies into their own voices,” adds Guthrie.

In fact, research by LinkedIn puts the collective network size of employees at 10 times larger than a company’s own network.

Having maxed out LinkedIn’s 30,000 connections, Geoghegan uses the platform to promote his podcast and connect with industry professionals.

“I diarized time to maximise the amount of time I spent trying to connect with more people. I was lucky in the sense that people knew that I had a personality, that I had opinions, and that I had a sense of humour.

“And I had a way of looking at the industry that was different. Also, having a difficult-to-spell surname is quite handy – people think ‘I kind of already know this guy.’ You’re sort of famous within a tiny segment of the world.”

Future opportunities

In the B2C sphere, social media algorithms are changing the way we see content. TikTok’s algorithm has upended the traditional algorithm where viewers see the content of their friends, family, and favourite influencers first, says Guthrie.

“It operates a content graph and serves up content based on what you’ve previously watched and engaged with. The other platforms are now copying this, suggesting a lot more recommended content beyond the videos created by people you follow on their platforms.”

The change in algorithm gives newer “finfluencers” the capacity to spread their influence, with potentially detrimental consequences.

Importantly, however, the “finfluencer” model does not translate into the B2B (re)insurance sphere, says Geoghegan.

“You can see why it would work for retail insurance, but it’s not working for my market. My market is wholesale, it’s grown up. It’s a £100 million plus kind of world. I suppose that’s an obvious generational divide – something that somebody who’s 30 years younger than me may make work.”

However, both Geoghegan and Guthrie agree that influencers are crucial in demystifying financial services and attracting new talent.

Using Geoghegan’s industry influence, The Voice of Insurance podcast has become a platform for young people to advance their careers by “educating themselves, working out how CEOs think, and also increasingly finding the kind of company that they want to work for,” says Geoghegan.

“Companies are slowly realising that this is important. The podcast is a medium where people are actually listening.”

This year, the global influencer marketing spend will nudge $31 billion (£25 billion), according to Guthrie.

“By 2027, it’s forecasted to reach $48 billion (£39 billion). Influencer marketing is not a fad.”

This article is from Financial Promoter’s print magazine. Click here to subscribe to the next edition.