Private Banks Navigate Influencer Partnerships with Caution Following SEBI Crackdown

In India, private banks are increasingly turning to social media influencers to promote their products, but they are proceeding with caution in light of recent regulatory developments. The Securities and Exchange Board of India (SEBI) has prohibited regulated entities from associating with financial influencers who are not registered with the market regulator. Financial influencers, or “finfluencers,” are individuals who affect investment decisions through content shared on platforms like YouTube, X (formerly Twitter), and Instagram.

India’s largest private lender, HDFC Bank, has been leveraging influencers to market flagship products such as the Millennia Credit Card, Pixel Credit Card, and the PayZapp app, particularly targeting younger, tech-savvy consumers. Additionally, HDFC Bank collaborates with influencers like Vigil Aunty and FJ Moneysha to promote financial literacy and fraud awareness, reflecting its commitment to responsible banking practices.

The influencer economy in India, which is expected to grow by 25% this year to ₹2,344 crore, is becoming a key asset for banks. An EY survey indicates that 33% of marketers in the banking, financial services, and insurance (BFSI) sector plan to increase their influencer marketing budgets by 10%.

Despite this, banks are taking careful steps to adhere to regulations. They meticulously select influencers and oversee the content creation process to ensure compliance with SEBI’s rules. “As a regulated entity, we adhere to industry regulations, self-regulatory guidelines, and internal policies to ensure transparency and integrity in our influencer marketing efforts,” said Rohit Bhasin, Chief Marketing Officer at Kotak Mahindra Bank. Bhasin added that their evaluations include metrics like reach, engagement, and thorough background checks.

SEBI’s recent ban on associations with unregistered financial influencers aims to protect investors from misleading claims of high returns. Banks are also avoiding influencer partnerships related to investment products, focusing instead on consumer-facing offerings such as credit and debit cards.

Varsha Shukla, a comedy content creator with significant followings on Instagram and YouTube, described her collaboration with Federal Bank as smooth and well-regulated. Federal Bank emphasizes selecting influencers whose content aligns with their products, ensuring authenticity and compliance with regulations. “We prioritize the fit between product, persona, and audience,” noted M.V.S. Murthy, Chief Marketing Officer at Federal Bank.

Shashwat Sharma, a partner at consulting firm Kearney, highlighted the distinct regulatory environment for financial services compared to other industries, emphasizing the role of regulators in protecting consumers and ensuring compliance. “While non-regulated industries often operate on a ‘buyer beware’ basis, financial services require a more comprehensive regulatory approach,” Sharma said.