As India crashed out of the T20 world cup, I watched the proceedings in growing distress. The quality of our cricket team’s performance was not the only thing resulting in the said distress. With every ad break came a plethora of new-age fintech brands luring gullible millennials and Gen Z into all sorts of products.
I still can’t believe I am having to write an article like this but my distress looking at those ads was for real. Every time one of those dratted ads came up, my husband was quick to look my way, grin and then start singing the jingle loudly adding to the jarring ads. Finally, his therapist-for-Aparna mode switched on and he told me to get my angst about these ads out on my digital corner so that it also serves as a word of caution for people almost tiptoeing their way to those products.
So, here goes 4 Fintech ads that get my goat and which should definitely not be taken on face value.
1. BitBNS FD or FIP
FD is a term we associate with comfort and the age-old secure way of stashing some money in the security of a bank. But, BitBNS is happily turning that concept on it’s head.
To the uninitiated, Bit BNS is a crypto exchange. If listening to the words “crypto exchange” and “FD” in the same breath has got you confused, join my tribe. Although the TV ad I often saw played out, is something I am not able to locate on Youtube any more, check out this video of what they are now taking to calling FIP or Fixed Income Plan.
So, apparently the product offers “guaranteed returns”. As per different FIP plans on the platform you block some of the crypto currency you own. These could either be one crypto or even a combination of specific cryptos. So, there could be an FIP where you need to block a combination of Bitcoin and something called a PancakeSwap for which the symbol is CAKE (that’s the verbatim example I saw on a youtube video!).
But, the problem starts there. While booking this so-called FIP what you see as an interest or coupon rate is shrouded in “Estimated Returns”. So, even if someone says you will get an estimated 20% p.a. how do you know what is it that you are locking up your money for. And wait a second, did I say locking up your money? No, locking your crypto for which in itself is volatile.
So, you could end up booking a BitBNS FIP. At the end of it, suppose crypto has had a horrible turn of events, who knows whether that 20% is going to be given to you or not and you could simply end up with a big fat zero (or for all you know negative). Plus, if the currency value went down by 20-odd% (easily possible with one Elon Musk tweet), then how the hell is this a Fixed Deposit or a Fixed Income Plan?
Investing is about compounding your money, and not compounding your risk by layering it up.
The worst part? They advertised it as “safe”. When I saw the above ad, I also noticed the words “Zero Risk”. There is no concept of zero risk in finance. Even with FD, the notional risk is inflation. Luring naïve, gullible people in a hurry to get rich and have the crypto swag is just not on and I do believe the regulator needs to step in here.
2. Coin DCX
No, this post is not simply about trashing all crypto. I have done my share of it in this post. Here, I am specifically talking about this ad, featuring an actor I used to respect, Ayushman Khurana.
The first thing which strikes me is the amazing characterisation. For most of us, crypto currency investing is for the flashy, funky people that we may not want to associate with. But, in this case the interesting part was how it is those avatars of Khurana trying to be the voice of reason saying he should not be investing in crypto. Whereas the plain dressed avatar, who looks like a stereotypical version of a rational investor is the one talking about why crypto is “the future”.
Then comes the best part. They of course talk about how there are only quality checked cryptos on CoinDCX. Plus, they use words like crypto trading is “absolutely safe” and they also use a phrase “funds insured”. Trust me if crypto had a personification, even that would be shaking it’s head vigorously in rejection of such terms.
Catering to a very different segment are the Ranveer Singh ads for Coinbase, yet again telling people that crypto trading is what will get them to grow like crazy.
3. Post Pe
This is the ad and the jingle which was stamped all over each break in IPL, or so it seemed.
I have been a credit card user for years and viewer of their advertisements for even longer. While all of them try and showcase living the good life with a swipe, none of them really kept trying to tell people to pay aaram se. The funny thing is that Post Pe seems more like a credit card letting you pay next month.
Even the imagery is of these young kids swiping their way to an unaffordable life. All I could see was an easy recipe to rack up debt and then paying it off leisurely at a mere 1.5% per month!! The only one who makes money or builds a good habit is the fintech itself.
I believe in equity. Good quality stocks bought and held for a longish period of time. I also understand the thrill factor for some investors who would rather trade for shorter periods although there too I would hope for some research going into the decision.
So then why would a simple, innocent stock broker get my goat so bad? My problem is with the communication. There are two particular ads I remember. One, where they show a client for whom choosing a profile picture is difficult unlike picking stocks on Upstoxx. Two, where they show another client for whom braiding his daughter’s hair is difficult unlike picking stocks on Upstoxx. Ending the ad with a rapid fire disclaimer does nothing to negate the technicolour wrong message being beamed out.
Oh and then there was another ad which created this unbelievable urgency to invest in IPOs. It shows this young woman running towards a marathon finish line. Suddenly, she stops because she needs to invest in an IPO since that opportunity wouldn’t come again while she can always run towards the medal next year.
Making money in equities happens for a reason. Minority of the stocks make money majority of the time. If you blindly pick and choose stocks, it is not going to suddenly yield results. Also, however good the platform, I am quite sure understanding the metrics to be checked is more difficult than choosing a profile picture or hair braiding.
More importantly, equities is an asset class for the long term. Creating this hype to build up IPOs and contribute to having them listed in this red hot market at sky high valuations is financially irresponsible behaviour in my books.
So, yes, these messages are very alarming!
Quick money making or simple spending schemes are always a road to doom which is what these ads seem to happily prescribe. Worryingly, when people come in with the expectation of a one-sided upward movement on their money, the minute there is a big enough hit many leave the idea altogether. I have now met investors who stay away because they got hit either in 2007 or who stopped their SIPs in 2020, never to return again.
Don’t get me wrong. I am not a disgruntled non-participant from investing. But, the problem is that in these bright, sparkly times almost anyone can get swayed by these ads to get the very wrong message. Investing works fabulously when it is well-thought out and tended to with patience over a long runway. That, in effect, is what Elementum Money will always stand for.