Influencing the Finfluencers
The FCA targets finfluencers—and offers a quiet boon for RegTech innovators like Sedric
Social media has made many things more accessible: news, entertainment, misinformation, and now—financial risk. In recent years, a curious species has emerged at the intersection of finance and fame: the finfluencer. Equal parts lifestyle guru and self-styled investment expert, these online personalities have cultivated vast followings by dispensing advice on everything from cryptocurrency trading to forex speculation. For the Financial Conduct Authority (FCA) in the UK, the trend has become increasingly intolerable.
Steve Smart, joint executive director of enforcement and market oversight at the FCA said: 'Finfluencers are trusted by the people who follow them, often young and potentially vulnerable people attracted to the lifestyle they flaunt. Finfluencers need to check the products they promote to ensure they are not breaking the law and putting their followers' livelihoods and life savings at risk.'
According to the FCA, finfluencers are not FCA authorised and are unqualified to be giving financial advice to the younger and often very impressionable age groups who follow them.
Just a few months ago, the regulator issued a pointed rebuke to the practice, announcing enforcement action against firms that pay influencers to promote high-risk investment products without proper oversight. It is part of a broader crackdown on unlawful financial promotions—a campaign that has already resulted in the removal or ammendment of more than 19,766 misleading adverts and the disruption of numerous influencer-driven marketing schemes.
Lucy Castledine, Director of Consumer Investments at the FCA, said: 'Over the past year, we have seen a growing number of misleading and illegal financial promotions. We have stepped up our efforts in response to make sure that financial promotions are clear, fair, and accurate. We expect firms to take the necessary steps to meet standards and will continue to work with other bodies, including social media platforms, to prevent illegal promotions being pushed at consumers.'
The FCA’s message was unequivocal—just because a person has a high number of followers doesn’t mean they are the right person to be promoting a financial product. Behind that plainspoken observation lies a serious regulatory concern. Many of these promotions are illegal under UK financial promotion rules, and even more are irresponsibly vague, glamorising volatile financial instruments without disclosing their inherent risks. The result, in too many cases, is consumer harm—especially among younger demographics drawn to social platforms as sources of both entertainment and financial advice.
The response from Whitehall has been supportive. Yet amid the regulatory sabre-rattling, an opportunity emerges—quiet but significant—for those building tools to help financial firms navigate such terrain. Chief among them is Sedric, a RegTech platform offering real-time compliance monitoring for consumer marketing and communications. If the FCA’s crackdown heralds a new era of promotional vigilance, Sedric is poised to become one of its most vital enablers.
Watching the Watchers
Sedric’s proposition is elegantly straightforward: automate the oversight of financial promotions at scale, across the fragmented sprawl of modern digital media. In practice, that means deploying compliance-trained Large Language Models (LLMs) to review influencer content—Instagram posts, TikTok videos, YouTube streams—against regulatory standards such as those laid out by the FCA in its guidance on high-risk investments and promotions.
Consider a typical finfluencer post: a slick video promising passive income through crypto staking, with little mention of volatility, security risks, or the lack of Financial Services Compensation Scheme (FSCS) protection. Sedric’s algorithms would flag this as non-compliant, alert the firm in real time, and potentially prevent the post from going live. The aim is not merely to catch infractions after the fact, but to embed compliance into the very process of content creation.
For firms engaging influencers, Sedric offers something even more valuable: a framework for risk-based vetting. By scoring influencers on historical content, tone, and promotional accuracy, the platform helps compliance teams steer marketing away from reputational hazards. In a regulatory environment that now scrutinises not only what is said, but who says it and how, such tools are becoming essential.
The Realpolitik of Compliance
It would be naïve to suggest that the FCA’s actions will chill all influencer-led promotion. Financial firms still face pressure to reach younger, mobile-first customers. A recent report from the Financial Times noted a growing reliance on influencer campaigns by fintech brands looking to capture market share among Gen Z and Millennials. But the days of unchecked influencer marketing are over. What lies ahead is a more sober landscape—one in which creativity must coexist with caution.
This is where Sedric’s value becomes clearest. Compliance, long seen as a drag on innovation, becomes an enabler. Marketing teams are empowered to experiment, secure in the knowledge that each iteration is being scrutinised in real time. Legal and compliance teams are no longer gatekeepers slowing things down, but partners helping the business move faster, safely.
And, crucially, when regulators come knocking, Sedric offers an auditable trail—a digital paperchain proving that a firm took every reasonable step to ensure compliance. In the eyes of the FCA, that distinction could mean the difference between a warning and a fine.
Beyond the Crackdown
The FCA’s offensive against finfluencers is part of a larger evolution in financial supervision. As digital-native consumers interact with increasingly decentralised content, regulators are adapting. That adaptation will not stop with influencers. It will extend to AI-generated content, chatbot-led investment advice, and the next iteration of retail financial marketing.
Firms that treat compliance as a living system, rather than a static obligation, will be best placed to thrive. They will need technology—flexible, intelligent, and automated—to keep up.
Though Sedric is unlikely to feature in any viral TikTok, in the boardrooms of financial firms—and perhaps, increasingly, in the halls of the FCA—it may become the name everyone wants to know.
