Financial services is the second-least trusted industry sector, according to the most recent Edelman Trust Barometer. So it shouldn’t come as a surprise that people are turning away from financial institutions and towards other channels for financial advice.
Personal finance is the latest and greatest trend to grip TikTok, the world’s most popular entertainment app. One survey suggests nearly a quarter of young American investors have used it for financial advice. “FinTok”, as it’s known, is now global and still growing. #Stocktok has 1.4bn views and #PersonalFinance more than 5.7bn.
In posts that usually last less than a minute, creators post practical career and investment tips to help their followers manage money. Tagged videos cover everything from budgeting to Isas, taxes to debt.
So TikTok is now Gen Z’s financial education hub. Although TikTok itself doesn’t share user stats, by some estimations nearly 70% of its audience is 24 or younger. For many, it’s their first and only source of education on money matters. This newfound enthusiasm for FinTok coincides with a growing interest in personal finance among young people more broadly. One study suggests that 46% of 18- to 34-year-olds become more interested in investing over the course of the COVID pandemic. Young consumers are clearly thinking about money: how to make it work for them, earlier and with more care. FinTok has been essential to that democratisation process.
So how can marketers and brands take advantage of this explosive trend?
To find out, we analysed and coded more than 100 FinTok videos using our first-of-it’s-kind, qualitative TikTok methodology.
By exploring the FinTok space through hashtags (#PersonalFinance, #PersonalFinanceTips, #PersonalFinanceTikTok, #Financetok, #Finance, #MoneyTok, #Moneytips, #Investing)we can show brands how to understand consumer attitudes towards personal finance. What motivates consumers to improve their finances, what stands in their way. How to feed this all into product innovation and marketing. Use TikTok, in other words, to gain insights into unmet customer demand and you’ll be handsomely rewarded.
Here are our overall conclusions/ some quick pointers:
- Don’t fight it. For years, financial services brands have educated the public via seminars, podcasts or free books. On Fintok, however, their absence is noticeable. But a failure to move on to social media platforms risks failing to reach new investors and clients altogether. The use of Fintok for advocacy and sharing advice shows that there’s a need for brands to practically and emotionally support those at the start of their personal finance journeys.
- Use the force. Working with influencers who are established on FinTok can help to build credibility and audience – and is one of the ways of overcoming Gen Z’s reluctance to engage with branded content.
- Inform, inform, inform. Non-qualified people are sharing financial tips and getting-rich-quick ‘hacks’. There is a need for financial brands to correct this by ‘myth-busting’ and ensuring consumers are receiving accurate, succinct information.
- Reference and address their no. 1 concern. Be sure to offer personalised financial advice that discusses the pros and cons of taking financial risks versus playing it safe. Someone else might swoop in to address this central consumer preoccupation if you don’t.
- Show empathy with Gen Z’ers. Express that you understand their frustration with the current economic and financial system, proactively come up with ways for them to get a leg up and go the extra mile as a company to create opportunities for the young. They’ll reward you for listening to their concerns.
- Make em’ laugh. The reach and engagement of FinTok videos prove that people are, in fact, interested in financial education. But 60-second videos only go so far. Financial service brands should offer people the opportunity to sharpen their financial prowess with additional, more detailed content, delivered in the same easy-going, humorous and accessible manner.
- It’s all personal. The one-size-fits-all approach to managing people’s finances is too impersonal. The immediacy, relatability, and intimacy of FinTok could make traditional banks’ customer engagement feel archaic. Personalise your financial services offerings and marketing to reflect the wide variety of genders and ethnicities interested in personal finance online.
Let’s dive into the details.
1) The eternal faultline: taking a risk vs. playing it safe
Any financial service brand needs to be aware of and address today’s most pressing consumer question in their offerings: should you take financial risks or play it safe?
We see a definite split on FinTok between more traditional, “safe” ways of making money and riskier, “get rich quick” ideas.
The former views saving as the focal point of personal finance. Creators advocating ‘safe’ money management typically recommend setting aside a percentage of your salary in savings every month (most often 20-50 per cent) in order to climb the property ladder as soon as possible. Property is portrayed as a stable and strategic long-term investment for everyone, regardless of circumstance.
Here are some good examples:
The second, considerably larger category of creators peddle riskier financial advice, often revolving around cryptocurrencies and playing the stock market. To them, personal finance equates investing – saving is rarely mentioned. When it is, saving is mostly mocked as an outdated, ‘middle class’ delusion. Younger, predominantly male creators are especially drawn to the idea on making a quick fortune on the stock market.
These posts crystallise the divide between the two sides perfectly:
The creator of the last video, Avery Heilbron, is in his twenties and plays two characters epitomising both sides – despite not being old enough himself to have tried either financial approach. The implicit subtext of the post is that the riskier path is more appealing, perhaps because it represents greater gain at lower effort and a shorter time frame. The risk is downplayed since there is no suggestion that taking the risk could fail. It is also implied that the “traditional” path of financial growth (via earning and saving) is actually just as risky.
So be sure to offer personalised financial advice that discusses the pros and cons of taking financial risks versus playing it safe. Someone else might pounce on the chance to address this consumer preoccupation if you don’t.
2) Anything is possible in the wild west of personal finance
At its worst, Finance TikTok perpetuates financial myths, scams, and dangerously misleading information.
What users end up seeing often isn’t good advice from trusted sources. Traditional banks, financial advisors and services are nowhere to be seen. This needs to change.
At the moment, unregulated influencers could even engage in market manipulation by giving tips that benefit their own investments. We see some promote financial apps that they may or may not reveal they are affiliated with. Other times, it’s business owners promising to make you a millionaire — all you have to do is give them your money first.
Here, for example, is an aspirational lifestyle being projected in a highly alluring way – without any mention of the potential risk.
There is a huge element of performance to this account, clearly aimed at luring viewers (especially young men) into signing up to his “how to” trading course – a thinly-veiled get-rich-quick scheme.
Here is another account that uses the same methodology.
Check out Vox’s breakdown of other common FinkTok investment scams.
While TikTok is taking action to reduce the potentially harmful content on the site, its systems haven’t been robust enough to detect and weed out content that falls foul of its revised policy.
So it seems the wild west will remain untamed as long as trusted and well-established financial services actors will remain on the sidelines.
To the loss of everyone involved.
3) A preoccupation with outsmarting the system that failed you
FinTok videos often go out of their way to create the sense that by watching these videos, viewers are privy to rare insider knowledge that the masses do not possess.
Creators reflect this by using phrases such as “things rich people won’t tell you” and “5 things about finances you weren’t taught in school”. Here is an example:
Many videos play on the idea of outsmarting your peers, Wall Street, or even the globalist capitalist system – revealing a young generation that is profoundly disillusioned with traditional financial service providers, the economic status quo and a perceived lack of opportunity.
This pessimistic FinTok view – that it is irrational to defend and trust the current economic system – is echoed in research. According to a 2019 poll by the charity Barnardo’s, two-thirds of under-25s believe their generation will be worse off than their parents. In one survey of UK Gen-Z’ders, 67% want to live under a socialist economic system.
So to best reach them, show Gen-Z’ders that you understand their frustration. Support their quest for financial self-education, regardless of how you feel about their desire to outsmart a financial system that seems to offer them little other than insecurity and repeated crises.
4) Personal finance is too important to be taken seriously
Fintok videos teach all financial service brands a simple lesson: learning should be fun. TikTok educational videos are notably different to other social platforms, focused on enjoyable, bite-sized pieces of info to make people think.
In this chart, we see that most of the posts – 45 per cent and 28 per cent respectively – feature light-hearted moods like ‘humorous’ and ‘friendly’.
Within the humorous category, a lot of creators with a large enough amount of followers to be considered potential influencers frequently use a “comedy sketch” style of performance to make their point. They often donn different clothes and accents to play-act two different characters in conversation, to make a certain point in a way that is then easier to understand and digest.
Here is a lighthearted example:
Sometimes comedy sketches aren’t necessarily humorous, but a convenient way to create a narrative that conveys their point by example. In this video the creator is an older Boomer generation creator who is setting up both himself and the younger audience he is directing his clip to, in a comedic way:
So, all financial services brands should listen carefully: edutainment is king on FinTok. Tailor your content accordingly to best reach and develop a long-lasting relationship with this young audience.
5) An appeal across genders and ethnicities
We were struck by the cross-section of genders and ethnicities that are active on FinTok. The audience has a more diverse set of characteristics than traditional investors, with more females, young people and those from a BAME background.
That’s not to say that the different groups are engaging with FinTok users on the same terms.
The “finance bro” community is, for starters, alive and well. Male creators outnumber female creators by 2-1: 66 per cent of the videos featured compared to only 34% of the videos featuring women.
We also see that male TikTokers often leave derogatory, insulting comments under the videos of their female peers and appear to be getting more likes and engagement on their content. Gender stereotyping is, in other words, still all the rage on FinTok.
It therefore might come as little surprise that the women that are active in this space are proactively fighting back, often positioning themselves as “financial feminists”.
One feminist FinToker, Tori Dunlap, describes her mission in her profile description:
“fighting the patriarchy by making you rich💸”.
Her videos revolve around empowering women to take control and understand their finances. Here is a small selection:
Money gives you the choice to leave that job, relationship, living situation, etc. Let’s make more money together! #financialfeminist
Welcome to Rich B!tch TikTok! You can start by following and watching the “start here” playlist. #financialfeminist
Another creator, Bola Sol, emphasises how important it is that women protect themselves financially and interestingly directs herself to specifically advise young married women.
In this video, she encourages them to maintain their independence by:
- Putting aside some money for themselves in case things don’t work out with their partner.
- Always be aware of how their husband is managing their household finances.
Financial advisors and banks can learn a lot from how a diverse range of content creators are helping an equally diverse audience kickstart their personal finance journeys. Helping Gen-Z women and the BAME community to build wealth through investing and entrepreneurship is key, and so is personalising content for these groups.
Opt for immediacy, relatability and intimacy. With a cross-section of genders and ethnicities hooked on FinTok, a traditional one-size-fits-all approach to managing people’s finances is simply too impersonal.
The success of FinTok presents an opportunity for financial service brands: it shows an appetite for receiving financial information and advice on TikTok amongst a Gen Z audience.
So how might these brands use FinTok to reach new audiences, understand what makes them tick and what their ideal customer journey looks like? We found that:
- The use of Fintok for advocacy and sharing advice shows that there is a need for brands to practically and emotionally support those at the start of their personal finance journeys.
- Working with influencers who are established on FinTok can help to build credibility and audience – and is one of the ways of overcoming Gen Z’s reluctance to engage with branded content.
- Non-qualified people are sharing financial tips and getting-rich-quick ‘hacks’. There is a need for financial brands to correct this by ‘myth-busting’ and ensuring consumers are receiving accurate, succinct information.
- Be sure to offer personalised financial advice that discusses the pros and cons of taking financial risks versus playing it safe. Someone else might swoop in to address this consumer preoccupation if you don’t.
- Show empathy with Gen Z’ers. Express that you understand their frustration with the current economic and financial system, proactively come up with ways for them to get a leg up and go the extra mile as a company to create opportunities for the young. They’ll reward you for listening.
- Keep your marketing and financial service advice light and entertaining. Consumers want accessible, digestible content that spurs their thinking; not a doorstop.
- Personalise your financial services offerings and marketing to reflect the wide variety of genders and ethnicities interested in personal finance online.
So keep on checking Fintok – you’ll have front-row seats to how personal finance trends among consumers are moving.
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