You open Instagram and someone says: “Three things I wish I had known before I started investing.”
You go on TikTok and the message is: “This is the asset that no one tells you about.”
If you have a profile on any of these platforms, you probably know what compound interest is, what ETFs are, or how inflation works. Otherwise, you might never have been able to read a financial article. Social media has democratised access to financial information, but it has also blurred the lines between education, opinion and entertainment.
The problem is not that they talk about finances on social media. In fact, it is a good thing that finances have entered everyday conversations, and new technologies are a great ally when it comes to promoting financial inclusion. What we need to worry about is how we filter this information. Viral content is not necessarily reliable, nor is a person who communicates confidently necessarily an expert.
These days, a short video can influence our perception of an investment or our way of understanding saving. The challenge is no longer just about accessing information, but about knowing how to interpret it and assess its reliability. The same ecosystem that fosters financial literacy may contain risks and biases that we need to be aware of.
And to explain this, we first need to understand how the algorithms behind each social media platform work. These are the sets of rules and systems that determine what content is shown to each user and in what order. Based on the analysis of user behaviour and the signals of each post, they prioritise the publications they consider most relevant to each person. And often this content does not come from accounts that we wanted to follow or proactively consult.
Algorithms prioritise content capable of capturing our attention. So, easy promises and strong messages are more attractive than nuanced explanations. In this environment, we can end up taking popularity, repetition, or the trust that someone inspires in us as substitutes for evidence.
On top of that, we may find that the algorithm acts as a confirmation bias. If we search for “Is it a good time to invest in such and such an asset?”, the algorithm will begin to offer us related content. And then more content. And even more. This can lead us to mistakenly think that everyone is talking about the same thing. Our information environment has become increasingly homogeneous because the algorithm has learned what interests us and what makes us continue to consume content.
Other cognitive mechanisms, such as the so-called bandwagon effect or social proof, help us understand why certain content can acquire credibility that does not always correspond to its rigour. This leads us to interpret the popularity of an idea as an indicator of its validity. In a digital environment, the number of views, followers or comments can generate a sense of consensus that makes us confuse what many people believe with what is substantiated.
Financial literacy must go beyond economic concepts and include the ability to analyse, question, and verify. That’s why it’s so important to verify who is talking, check their identity, their track record, and whether they have reputable collaborators… or go directly to official sources, recognised experts, or professionals in the sector. It is also important that we question categorical statements and compare them with other sources. Likewise, we must carefully examine the content that reaches us through social media platforms and analyse what behaviour we have exhibited for it to be shown to us, and if it raises doubts for us, we must look for other information channels.
In a society saturated with information, knowing how to manage money also requires knowledge of how to manage the information we receive about it.
Article publicat al Diari d’Andorra, 11.11.26
