What is TikTok? Ask a Gen Z person and they will probably tell you it’s the biggest social platform of their generation. But, for so-called ‘finfluencers’, it’s also the heart of the financial advice proposition.
With an estimated 689 million monthly active users , and 41% of the platform’s users between the ages of 16 – 24 years old, TikTok is the fastest growing social media platform on the planet.
The emerging platform is evolving, and so are influencers. No longer bound to comedy meme culture and teenagers perfecting the moves to the latest dance craze, TikTok is home to a variety of subcultures and microgenres – including financial advice.
Finfluencers as educators
Where do the tech-savvy generation turn in search of financial education? In no small part, to finfluencers.
Found under hashtags like #FinTok or #StockTok, ‘finfluencers’ generally focus their content on investments, money management and personal finance and it’s clearly popular: Gen Z and millennials are turning to the short-form videos in big numbers. Currently, videos under the hashtag #Financetips have a staggering 78.6M views, #Financialeducation 56.1M views and #Financialadvice 26.7M views.
However, finfluencers, and the trend of seeking financial advice on social media, has come under fire recently. The Financial Conduct Authority (FCA) issued a warning on “risky” trading tips on TikTok following the GameStop frenzy and the online advice promising unrealistic “high returns”. Once in the shadows of a financial subculture, finfluencers are well and truly a mainstream feature on the financial landscape, with establishments such as BBC News online acknowledging such concerns.
Despite worries, it’s not surprising people are turning to social media for education and advice when we look at the wealth of research that suggests millennials and Gen Z struggle with the fundamentals of finance.
A recent survey revealed that over half of millennials revealed a financial literacy gap and could not explain basic financial term, including ISA, bonds, shorting, hedge funds, index tracker fund and derivatives.
The generation, however, still dream big and have a desire for financial education, with two-thirds of 18–35-year-olds keen to achieve their financial ambitions in the next 10 years.
Finfluencers are lowering the barrier to financial education making finance fun and engaging.
Follow the leader
Digital banks, investment platforms and growing fintechs have been capturing the younger market. Klarna, Moneybox and Snoop have been the latest to partner with finfluencers, generating ads and organic content on TikTok.
Plum, the AI money saving app, recently partnered with finfluencers @tempahtime and @moneywithmatt, whose content, on all things finance, business, and entrepreneurship, targets teenagers and young adults. Plum not only ran a series of ads and tutorials on saving money and investing in stocks, but a ’52-week savings challenge’, where users incrementally saved small amounts and on average, saved over £1,300.
The key to Plum’s TikTok campaign is engagement. #Challenges inspire not just ads and placements, but a wide range of user-generated content and spin-offs. In the case of Plum, users followed in the footsteps of finfluencers with their own short-form videos and reactions. Each video was stored neatly under the campaign-specific hashtag created by the brand, driving user engagement and ultimately, increasing awareness and interaction.
The battle of the platforms
The rise of the influencer may be thanks to Instagram, but TikTok is shifting the landscape for social media marketing.
According to recent data running effective ads on TikTok was 300% cheaper than Instagram at getting users to download products and use services. Why? One reason is that whilst Instagram is still largely tied to image sharing (despite the introduction of the ‘reel’s feature), TikTok has nailed the art of short-form video content. Short-form video is a genius way of capturing attention in a world saturated with content. In fact ,users spend 88% more time on a website that has video and on socials, with video generating 1200% more shares than text and images.
For a generation short on time, overloaded with content and with a growing appetite for financial education, it’s a perfect time to navigate the waters of short-form video for finance.
What content works?
The app itself has various initiatives for marketers to tap into. Currently at 66 billion views, #LearnOnTikTok is the newest initiative to hit the platform. The company made $50 million available through their creative learning fund to support the creation of various education videos to promote education during the Covid-19 pandemic.
Younger generations also have a clear focus on values. 90% of millennials want to tailor their investment to their wider ethical values – brands with an ESG investment focus, for example, have a real opportunity to talk and create content that speaks to a younger generation on issues they directly care about. Whether that is choosing renewable energy stocks or a guide to an ethical pension fund, TikToker’s are more than ready to soak up knowledge.
Clients of Tomorrow
Digital banks, Investment platforms and fintech players are carving out significant funds in their marketing budgets to leverage the young audience hungry for education and digital solutions, on a platform that is not yet saturated with financial content.
As the FCA stated, it’s clear there must be caution around financial advice that promises ‘high-value’ investment returns.
However, finfluencers are here to stay as part of the growing trend towards the democratisation of investment advice. As with everything, there is teething problems, but can ultimately be a good move if the conversation is steered in the right direction. From making finance engaging with TikTok challenges to closing the financial literacy gap, there is an opportunity for the fintech community to not just tap into the platform’s audience, but to be the educators of tomorrow’s consumers.
Article by: admin