South African Regulator to Monitor Activities of Social Media Financial Influencers

The Financial Sector Conduct Authority (FSCA) in South Africa has announced plans to monitor the activities of social media financial influencers, commonly known as “finfluencers.” Defined as individuals with a significant following on social media platforms, finfluencers exert considerable influence over consumer behavior through their content.

The FSCA acknowledged that while finfluencers have played a role in improving financial literacy and participation in financial markets, there are growing concerns about the public increasingly relying on social media content and the advice of celebrities rather than authorized financial advisers for their financial decisions.

“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 noted. Reports indicate that social media platforms are rife with celebrities and entities promoting dubious high-yield investment schemes, which the FSCA has repeatedly warned against.

According to the FSCA website, the authority aims to enhance and support the efficiency and integrity of financial markets while protecting financial customers by promoting fair treatment by financial institutions. The FSCA also provides financial education to further enhance financial stability in the country.

The agency highlighted several other areas of concern on the internet, including deepfake frauds, impersonation of licensed financial service providers and regulators, and exploitation on social media. It disclosed that fraudsters have even gone as far as impersonating FSCA officials, offering assistance to recover funds lost through scams or to process withdrawal requests.

“Social media platforms provide financial criminals with easy access to the public, and they exploit these opportunities,” the FSCA stated.

In response to these challenges, the FSCA has assured the public that it has improved its enforcement methods to adapt to the growing concerns related to online financial scams and misinformation.