The news:
- The Financial Sector Conduct Authority (FSCA), the country’s financial institutions market conduct regulator, has said it’ll keep an eye on the activities of financial influencers on social media in the next year.
- The watchdog, which succeeds the Financial Services Board, promised to take action to protect financial customers from potential harm. This development was part of several subjects in the agency’s latest annual regulatory actions report.
Defining social media influencers as individuals with a significant following on social media platforms, the agency claimed they wield considerable influence over consumer behaviour via social media content.
“This has inevitably led to the rise of ‘finfluencers’, referring to persons who post financial and investment related content, and sometimes specifically promote financial products through social media,” the agency noted.
While acknowledging that these finfluencers have improved financial literacy and participation in financial markets, the FSCA noted its concerns that the public is increasingly basing their financial decisions on social media content and the advice of celebrities, rather than on the recommendations of authorised financial advisers.
“The FSCA has seen evidence of finfluencers conveying misinformation, and perpetuating scams through social media. This presents a clear risk to the public,” the agency wrote.
Reports indicate that various social media platforms are full of celebrities and entities promoting dodgy high-yield investment schemes programmes, most of which the FSCA eventually warned about.
Per the FSCA website, the authority aims to enhance and support the efficiency and integrity of financial markets and protect financial customers by promoting their fair treatment by financial institutions.
As part of its function, the FSCA also provides customers with financial education to further enhance financial stability in the country.
Besides, the agency also underlined several other areas of concern on the Internet, including deepfake frauds; impersonation of licenced financial service providers and regulators; and social media exploitation.
It also disclosed that these fraudsters even go as far as impersonating its officials, offering assistance to recover funds lost through scams or processing withdrawal requests.
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“Social media platforms provide financial criminals with easy access to the public, and they exploit these opportunities,” the FSCA stated.
Accordingly, the FSCA has assured it has improved its enforcement methods to adapt to these growing online concerns.