Influencing financial decisions in 60 seconds

Retail investments from Gen Z and millennials in the stock market, shot up during the last two years. Sample this: the number of demat accounts more than doubled to 7.7 crore, as of November 2021, from 3.6 crore in March 2019. As per media reports, 75 per cent of demat accounts being opened by brokerages, are operated by people under 30 years of age.

This influx of young and first-time investors in the equity market is closely linked to the rise of fin-fluencers, or finance influencers. Ayush Shukla, founder, Finnet Media (a finance influencer management agency), says that finance influencers first cropped up in late-2020 and by mid-2021, they were signing brand deals. “At least 2-3 new creators enter the finance niche every month now.”

Blogs, long-form YouTube videos and podcasts have been the go-to mediums for fintech companies to educate prospective and existing consumers. More recently, short-form content is what is appealing to the young demographic, looking for advice or information in a bite-sized format.

Breaking the clutter

According to a 2021 GroupM INCA report on influencer marketing, the Rs 900-crore industry is dominated by the personal care (25 per cent), food and beverage categories (20 per cent). Fintech and BFSI together account for 10 per cent of the industry.

“Millenials and Gen Z consumers get advice on the Internet for travel, fashion, automobiles, etc. Finance is a continuation of that. There is a huge appeal for financial information that comes in a format tailor-made for these consumers,” says Manu Prasad, CMO, Scripbox, a digital wealth management service.

Sharan Hegde, a finance influencer with 1.5 million Instagram followers, posted his first video on the social media platform, in January 2021. In a little over a year, Hedge has become a sought-after content creator in the finance space. He has worked with brands like Slice, Sahicoin, The Souled Store and upGrad.

Anushka Rathod, another finance creator, began making videos about business and personal finance, when she was stuck in COVID-induced lockdown, unable to head to the US to pursue a Master's degree in finance. She has close to 400,000 Instagram followers, and has promoted fintech brands like Jupiter, Indmoney and CoinSwitch.

Fin-fluencers are doing more than just brand collaborations on Instagram Reels now. Hegde writes scripts for TVCs for fintech brands, offers courses on personal finance, and conducts workshops for corporates. He has also launched a newsletter on personal finance. Mukul Malik (founder, Asset Yogi) and Hegde (@financewithsharan) recently invested in fintech firm Vested Finance.

Akash Gupta, marketing director, Vested Finance, says that since the company enables Indians invest in US stocks, it is mainly mature investors who turn out to be the main users of the platform. "Ever since we began working with finance influencers, we are also seeing people in their early and mid-20s invest through our platfrom," he says.

According to industry executives, content creators like Hegde and Rathod can charge brands a couple of lakhs of rupees to create an Instagram Reel featuring the brand. More popular creators like Tanmay Bhat could charge anything between Rs 5 and 8 lakh. As per one estimate, a finance influencer could earn about Rs 20 lakh annually just from brand deals.

The buzzing fintech market in India is driving up customer acquisition costs and cost per click (CPC) for brands. According to a senior marketing executive, a decade ago, the CPC for a keyword like mutual funds was around Rs 5-8. Around five years ago, it increased to Rs 20. Now, a brand could pay Rs 80-100 for just a click, because more players are bidding for it.

An executive at a fintech firm, who does not want to be named, says, “Although the rates that fin-fluencers quote, may sound obnoxious at first, this is the price brands need to pay in order to break through the clutter in the fintech space, where customer acquisition cost could be at least about Rs 1,000 per customer.”

Srivar Harlalka, co-founder, Flippy, a crypto investment platform, says that a shout out or testimonial from one of these finance influencers could help a platform gain its first 1,000 transacting customers. And, once those customers advocate on behalf of the brand, the network effect kicks in.

At the top of the funnel

Scripbox, which used to target young, first-time investors a few years ago, partnered platforms like ScoopWhoop in 2018-19, to reach out to young audiences. But the company now targets a mature investor, and uses blogs, YouTube videos and informative posts on Twitter to educate consumers.

Prasad says, “For our current audience, we believe that our owned media is probably the best approach, as we have a direct relationship with the customer. Further, we get to demonstrate our own expertise on these subjects.”

Hegde began creating Instagram Reels because he realised very quickly that YouTube was already saturated with finance content creators. About 75 per cent of Hegde’s Instagram followers are men. The 18-25 age group makes up 30 per cent of his following and 50 per cent belong to the 25-35 age bracket. Hegde says that brands now sign 3-6-month-long deals with fin-fluencers like him and have firm KPIs that the campaign needs to achieve - this could be in terms of installs or quantum of money invested.

Rathod, who does not want to promote brands that sell products mainly for women, says that 70 per cent of the engagement on her posts, comes from the men who follow her. The majority of her followers are professionals who live in metro cities and write to her to understand basics of personal finance, including how to read their salary slips.

Influencer marketing mainly helps brands reach out to a wider audience through a trusted personality. Shukla of Finnet Media says that Instagram fin-fluencers work towards directing a person to find more resources on personal finance, read further and make an informed choice. Instagram Reels is where the personal finance journey begins for first-time investors.