With 7+ years of experience in the financial services industry and her global perspective, the entrepreneurial-minded Lissele is a recognised expert in financial technology, cryptocurrency and international payments.
Lissele's hard work and determination landed her a spot on the Forbes 30 Under 30 Finance list in 2021. She has also been shortlisted for this year's Great British Businesswoman Awards, European Women in Finance awards and the Women in Finance UK awards.
This month, social media mogul Kim Kardashian was charged $1.26 million by the Securities and Exchange Commission (SEC) for failing to disclose that she was paid £250,0000 to promote Ethereum Max on her Instagram page.
The rise of social media influencers has been a boon for many industries, but the crypto world is still divided on whether or not they are helpful to the space. Some believe that influencers are a necessary evil, helping to bring awareness to a still largely unknown industry. Others think they're nothing more than shills looking to make a quick buck off unsuspecting investors.
So, what's the truth? Are crypto influencers a curse or blessing for the FinTech industry?
The Rise of Crypto Influencers
If you've ever scrolled through your Twitter or Instagram feed, you've likely seen an influencer in action. Influencers have become a mainstay in our social media-driven world, from promoting a new product to simply sharing their daily life with followers.
The crypto industry is no different. In recent years, we've seen the rise of crypto influencers – individuals who use their social media platforms to promote cryptocurrencies, initial coin offerings (ICOs), and blockchain-based projects.
Crypto influencers come in all shapes and sizes. Some, like Kim Kardashian, have millions of followers and can command a handsome fee for a single post. Others, like aspiring YouTubers and Twitter personalities, are just starting to build their followings but are no less enthusiastic about the industry.
According to Influencer Marketing Hub, crypto influencers make around $500 to $1500 per thousand views. If you look at an influencer's average views for a video for a month, and the video views are around 10,000 views, you will make approximately $5,000 to $15,000.
The Benefits of Crypto Influencers
There's no doubt that crypto influencers have the potential to reach a large audience and bring much-needed attention to the industry. After all, the more people are aware of cryptocurrencies and blockchain technology, the more likely they will invest in them.
In addition, some crypto influencers are true believers in the technology and can help to promote its use cases and potential benefits to the mainstream world.
Pump and Dump Schemes
However, not all crypto influencers are created equal. Unfortunately, many promote dubious ICOs and pump-and-dump schemes.
A pump-and-dump involves artificially inflating the price of an asset through false and misleading positive statements to sell the asset at a higher price. Once the price has been pumped up, the perpetrators will then dump their shares. This results in the price crashing, and investors left with worthless assets.
SEC Response to Kim Kardashian
As mentioned earlier, Kim Kardashian has recently been involved in what the class action case deemed a pump-and-dump scheme.
In response to the case, SEC Chairman Gary Gensler said it was a "reminder" that celebrity endorsement did not necessarily make a product worth investing in.
Later, in a Youtube video about crypto investment, he added: "Celebrity endorsements don't mean that an investment product is right for you or even, frankly, that it's legitimate. Even if a celebrity endorsement is genuine, each investment has its risks."
FaZe Clan and Save the Kids
Another famous example of a pump-and-dump scheme is the FaZe Clan and Save the Kids crypto fiasco. Several members of the organisation promoted a new altcoin: Save the Kids. They generated interest in the cryptocurrency through a series of Tweets, videos and even announced themselves as brand ambassadors on their websites. The idea was that a percentage of the proceeds would go to a Children's charity.
People bought into the coin, and shortly after, it plummeted by a whopping 60%. The members of FaZe Clan that were involved in the scheme pumped interest into Save the Kids and then pulled the rug from investors, causing the price to crash.
$SQUID Game Coin
Another notable example is the $SQUID Game coin, named after the popular Netflix show. Although the coin had nothing to do with the show, it still managed to create a lot of buzz due to the popularity of the show. Influencers were quick to jump on the bandwagon and started promoting the coin.
The coin soared from just over a cent to $2,800 in a short period. However, after reaching this peak, it fell back to only a few cents a few minutes later.
Final Thoughts
It is essential to be realistic about the fact that most influencers are not financial experts and may not fully understand the risks involved in investing in crypto. In addition, influencers are paid to promote particular projects, which means that they may not be impartial.
Working with reputable brands that are transparent about their fees and have a good track record can help to mitigate some of the risks associated with crypto investment. For businesses looking to use influencer marketing to promote their project, it is essential to vet the influencers carefully and make sure they are a good fit for your project.
Up to $15 billion is expected to be spent by brands investing in influencer marketing by 2022. Influencer marketing brings a significant boost to many industries, and many B2B and B2C businesses now rely on influencers to extend their reach. This trend doesn’t exclude the fintech industry, and many digital banks, including Starling and Revolut, now use influencers in their marketing strategies. However, using influencer marketing requires careful thought, and there are certain rules regarding its use, which need to be considered carefully by fintech companies.
Fintech companies can benefit from influencer marketing
So long as the influencers are chosen to suit the niche, influencer marketing can be as beneficial to the fintech industry as it can to any other business. Influencers have the power to improve a business’s reach and visibility, demonstrate authority and target the right audience immediately. This is a valuable asset to any business operating in the fintech niche, but to be used to full effect, businesses need to choose an influencer whose lifestyle and message coincides with the brand’s ethos. Potentially, when used well, this gives fintech companies a chance to reach a much wider audience than they can through traditional advertising. However, although advertising standards authorities have guidelines for influencers, none of them relate specifically to financial products or services, which means those working in the niche need to tread carefully.
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Advertising regulations for influencers
Advertising guidelines state that influencers should use ‘#ad’ to tag any post they’re paid for: this is the minimum an influencer needs to do to legally promote a product or service. They are required to consider the demographics of their audience, as age-restricted products must not be promoted to underage followers. Although this rule doesn’t apply directly to financial products and services, companies and the influencers they work with must be aware of the demographics of the audience, as many financial products do come with age-related criteria.
Lack of regulations for financial services
There are no regulations for fintech companies using influencer marketing, but this is problematic because the majority of an influencer’s reach extends to a young audience. Advertising guidelines are currently focused on influencers labeling ads rather than on the products and services they’re promoting. For regulations to be established, close co-operation would need to be achieved between the advertising and financial regulators, but this has not happened yet. While this may be good news for fintech companies who can find influencers willing to promote their products, it’s more problematic for the consumer. The ideal situation would be that influencers truly believe in the companies they’re promoting. However, the algorithms on social media make it difficult to know for certain whether influencers or the brands they work with are operating with a full awareness of what they’re promoting. Consumers, therefore, are urged to research all products promoted by influencers before making a commitment.
Influencer marketing is one of the most successful marketing strategies any business can employ, but regulations are minimal. This is particularly problematic in the financial sector, as there are ethical considerations to be aware of in the promotion of any financial service or product. Consequently, although influencer marketing is a valuable tool for a fintech company, consumers must be wary when choosing products promoted by influencers. However, providing consumers conduct independent research, influencers can be helpful in informing them about new financial products.
Now more so than ever, it is crucial that small businesses use all of the resources at their disposal to attract leads, capital, and revenue. If you have concerns over how your business will survive and thrive in the coming months, then it's time to become more adaptive.
Businesses of all sizes and industries will need to be more competitive in order to cut through the noise and capture a slice of a shrinking customer and client base.
Fortunately, there are resources out there for businesses just like yours that can ensure your business model becomes more targeted, leaner, and more effective. Here are 10 essential tools that will bring more capital to your business in 2020.
Automated Mailing Software: Sendinblue
Precise, tailored, and personalised marketing campaigns are a powerful way of ensuring that your business reaches customers and clients more effectively than the competition. If you want to stop your marketing emails from heading straight to the Trash folder, then use an automated email personalisation tool like Sendinblue, which allows you to automatically tailor emails based on the details of those on your mailing list.
SEO Tools: SEMrush
The vast majority of consumers now conduct web searches about a product or service before making a purchase. That's why making sure your business appears on the first page of Google results can be the difference between success and failure. One of the most comprehensive Search Engine Optimisation tools around right now is SEMrush, which provides users with detailed information on the keywords, outbound links, and formatting needed to push their websites to the top.
The vast majority of consumers now conduct web searches about a product or service before making a purchase.
Lead and Contact Generation: Lusha
The key to effective lead generation is quality data. To boost the productivity and efficiency of your sales team, the B2B lead generation tool Lusha can help. This smart piece of software scans the LinkedIn profiles of potential clients and gives you all of the essential information you need to reach out to them in a targeted, effective manner. This simple web plugin will give you a contacts list that you can actually use.
Social Media Campaign Planning: Hootsuite
If you don't have a comprehensive, goal-oriented social media campaign, then you are already falling behind your competitors. Building a brand identity and a clear voice is essential for small business success - something that cannot be achieved in the modern age without social media. Using a social media management tool like Hootsuite will allow you to curate professional SM campaigns and track your success and engagement throughout.
Content Marketing Resources: Feedly
Content marketing is now used by a staggering 86% of B2C marketers, as it has been identified as one of the single most effective ways to reach diverse audiences. Of course, you will want to avoid the mistake of simply creating content on the fly and hoping that it sticks. With Feedly, you will receive bespoke content marketing suggestions based on data about your company, industry, and target audience.
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Influencer Marketing Platform: Fourstarzz Media
An increasing number of both B2B and B2C businesses now rely on a network of influencers and micro-influencers to boost their profile and generate sales. Of course, it can be exceedingly difficult to reach out and connect with influencers on your own. That's why companies like Fourstrarzz Media exist, to connect you with relevant influencers that they know are happy to market your products and services to their audiences.
Spend Management Software: Spendesk
If you're a small business you likely already operate on thin margins. If you want to widen this margin by reducing waste, then comprehensive spend management software is crucial. With Spendesk, you can track every penny that goes in and out of your company, in order to use your cashflow more efficiently. In addition, Spendesk's automated expense report and payslip generation platform will save your company time and money.
Small Business Loans: SBA
Whether you're just starting out in business or have been in the game for years, it's important to remember that help exists for when times are tough. The Small Business Administration is an extensive platform of government and non-profit-backed loans and credit available to small businesses. If you want a loan to help your business grow, this is the most reputable resource to apply for it.
Whether you're just starting out in business or have been in the game for years, it's important to remember that help exists for when times are tough.
Visual Content: Adobe
Engaging, aesthetically appealing visual content will go a long way toward getting your business noticed by potential leads. You might not have the resources to hire a full-time graphic designer, but that doesn't matter. With Adobe, you can create stunning, cross-platform visuals that are guaranteed to set you apart from the competition and enhance your brand identity.
Free Web Hosting: GoDaddy
If you're in need of a web host that is cost-free, high-quality, and secure, then head to GoDaddy to create a business website that won't cost you a penny. GoDaddy also has a range of helpful tools to get your website off the ground and ensure that it is SEO-formatted, visually appealing, and user-friendly. For business newbies, this is an essential resource.
With these tools, you can set your business above your competitors and attract additional levels of capital through increased sales, revenues, savings, and funding.
