Finfluencing can positively shape capital markets if used responsibly, says SEC Chairman
Finfluencing should not be looked at negatively; investors and potential investors should look at its positives and learn how to overcome the negatives, Securities and Exchange Commission (SEC) Chairman Senior Prof. Hareendra Dissabandara stated at a recent online discussion on the stock market and social media.
According to Prof. Dissabandara, ‘finfluencers’ are influencers who use social media to share financial and investing-related content.
He said they use YouTube, WhatsApp, Facebook, LinkedIn and other social media platforms creatively to share knowledge on finances and investments with a large audience.
He added that financial influencing or finfluencing via social media has increased rapidly over the past few years, with numerous finfluencers amassing millions of followers, as many youths have turned to social media for financial and investment information.
The SEC also revealed that during the COVID-19 pandemic period, a large number of investors plunged into online investing and the finfluencers can influence the financial decisions of others through promotions, endorsements or recommendations on social media.
“There is nothing wrong with this, as long as they share correct information online. Sometimes, the SEC and Colombo Stock Exchange have country-wide awareness programmes on the capital market,” Prof. Dissabandara added.
“However, instead of time-consuming physical workshops, a good finfluencer can do the same in much less time, for a massive audience.”
Prof. Dissabandara also noted that informative finfluencers have the ability to speak to an audience on a serious topic in an engaging manner, thus positively influencing the capital market.
He also urged the investors and potential investors to be vigilant of certain finfluencers and their motives, especially if a subscription is needed for their advice.
Prof. Dissabandara also acknowledged that there are instances where finfluencers try to manipulate the prices of shares or stocks, adding that this is a financial crime, as it creates an artificial market environment.
“Some finfluencers are also paid to endorse certain listed companies and they do not share this information with their followers,” he cautioned.
“They also only share positive aspects of these listings and not the negatives, which is also wrong as any economic transaction has negative and positive sides.”
He also noted that if the investors have received wrong information through social media, they risk making hasty, incorrect decisions, adding that it is vital to make quick but informed decisions in the capital market.
Image Caption : Senior Prof. Hareendra Dissabandara
Source : Daily Mirror
