Social media has revolutionized how consumers make purchase decisions in every aspect of life—from choosing a restaurant to selecting their financial institutions. This cultural shift is predominantly driven by digitally-native millennials and Gen Zers. The financial services sector must embrace social-first marketing to reach these new target demographics.
By shifting efforts to a social media strategy driven by targeted influencer engagement, financial organizations have a unique opportunity to outpace their competition with authentic connections to their key audiences.
Influencer Marketing vs. Traditional Marketing
Many financial institutions still rely on traditional marketing channels, like television commercials, as the main vehicle for reaching audiences. Linear TV advertising belongs to the era of mass media, where the goal was to reach as many eyeballs as possible. In reality, this is a shot-in-the-dark strategy tied to big budgets. In today’s always-online environment, social media, and more specifically, influencer marketing, enables brands to track and measure engagement and scale their efforts at a lower cost.
The average internet user spends 30% more time browsing social media than watching traditional TV. At the same time, the average TV audience is aging, meaning financial service marketers are trying to engage with an ever-shrinking pool of customers. Moreover, despite reaching a wider audience, traditional advertising is not cost-effective.
Influencer marketing, in the form of micro or nano-influencers, typically yields higher ROI and offers more exact measurement benefits. Put simply, TV commercials cast a wide, expensive net that catches less fish than the smaller, more affordable nets of influencer marketing.
Everyone’s financial situation is unique, and financial institutions need a way to speak to these different pockets of the market in an organic and meaningful way. Influencer marketing brings a highly targeted methodology that enables FIs to engage with niche audiences based on their financial situation through the voices of trusted content creators. For example, FIs can use small business and entrepreneur influencers to articulate the benefits of products and services to their business customers.
Making Financial Services Accessible Through Influencer Engagement
Influencers build communities of like-minded individuals who follow them to demystify certain areas of life, such as shopping, cooking, or organizing. Financial services influencers or “finfluencers” are no different.
Take Ellyce Fulmore for example, who, as her bio states, “humanizes personal finance”. One of her most viewed TikToks is a breakdown of her personal five-account system to illustrate how her followers can better understand where their money is going each month.
Meanwhile, Nicole Victoria teaches her viewers how to accumulate wealth more efficiently, demystifying topics like investing money and buying stocks or assets. Similarly, Gracey Ryback provides simple tips for saving money, such as how to shop smarter by finding the same items online but at a more affordable price.
By leveraging the authentic voices of finfluencers, FIs can drive product discovery and conversion with untapped segments of their target audience. While these efforts help empower consumers to build wealth and save money, they also establish the brand’s reputation and trustworthiness.
Balancing Risk and Brand Protection
One key reason established FIs have been slow to adopt social-first strategies is their focus on risk mitigation. Social media and influencer marketing is still considered in more traditional industries as uncharted and thus riskier waters. Additionally, the complex and evolving regulatory environment heightens concerns about brand safety.
Consequently, FIs are cautious about new marketing systems like influencer marketing, which they fear could leave them vulnerable to potential brand damage. As influencer marketing matures, so does its pool of creators, especially finfluencers who understand their ability to secure top brand partnership requires a high level of professionalism and brand safe content. They also offer the advantages of affordability and highly engaged niche audiences.
If financial institutions are still hesitant, they should consider AI-powered brand safety tools to align their influencer marketing campaigns with brand messaging. Being proactive about brand safety concerns also means a rigorous vetting process to ensure brand-creator fit as well as brand safety. These tools allow you brands to do this at scale with the use AI to analyze video, audio, images, and keywords across social media, sending alerts and generating risk scores based on customizable brand settings.
An Industry Ripe with Opportunities
It’s time for a financial service brands (new or established) to make a splash in social media and capture a massive chunk of the market share. With the fintech venture capital market struggling to raise money through fundraising, now is an ideal opportunity for traditional institutions to reclaim lost market share through social-first marketing campaigns.
Social media remains an open, green field with few players adopting meaningful social-first strategies. Those who transform first will undoubtedly become the dominant players in the future.