FINTOK LESSONS FOR FINANCIAL SERVICES BRANDS

By Emily Rule, Head of Strategy at Wunderman Thompson

Emily Rule, Head of Strategy at Wunderman Thompson

Personal finance is a hit on TikTok, The Economist recently reported. Young investors turning for financial advice not to financial services but to social media makes more than a snappy headline, however. It means the challenge for financial services to reconnect with customers – younger groups, especially – is now critical. So, what should financial services brands now do?

Nearly a quarter of young investors have used TikTok for financial advice, new research shows, with views on the social platform for videos tagged #moneytok recently topping a staggering 10.6 billion. The immediate question is: why? And one answer lies in the latest Edelman Trust Barometer in which financial services languished at the bottom of the rankings as the second-least trusted industry sector.

Consumers’ low trust in the financial services sector is often linked back to the industry’s struggle to re-build trust following the 2007-8 financial crisis. But it is also a result of banks ongoing inability to fully grasp the vast opportunity to play a more pertinent role in customers’ lives by offering timely and relevant support and advice on financial planning, managing household costs, investing, and saving.

The words ‘timely’ and ‘relevant’ are key – not just in relation to the content of the support and advice given, but the how, when, and where of that support and advice’s delivery. Which is where TikTok comes in.

TikTok expanded beyond lip syncing teens and viral dance trends a while back, developing practical finance videos that teach young people how to use their money better. At the heart of this are content creators collapsing hard to grasp concepts into informative yet short clips. Such content –comprising tagged videos covering everything from budgeting to ISAs, taxes and debt – is known as FinTok, and its creators as finfluencers.

FinTok is turning Gen Z heads everywhere. And this new flock of finance fanatics who, up until this point, have been totally disillusioned with traditional banks, and disinterested in personal finance, are devouring this mode of advice and applying the learnings daily.

The rise of FinTok creates challenges – notably, around the risk of presenting investment as entertainment and, also, how best to regulate finfluencers to protect those who might follow their advice. But FinTok’s success in demonstrating – to younger groups, especially – that finance is not boring and investing need not feel overwhelming offers a number of important lessons for financial services, especially banks:

Don’t fight it, embrace it

Banks should see the FinTok trends as a gateway to a new audience. Rather than condemning FinTok, step in to help people discern between sound financial advice and feeble get-rich-quick tactics. Whether that means endorsing credible content that already exists or injecting new legitimate financial advice into the FinTok universe, banks should get onboard. Now.

Fill the gap

The reach and engagement of FinTok videos proves that people are, in fact, interested in financial education. But 60-second videos only go so far. Banks should offer people the opportunity to sharpen their financial prowess with additional, more detailed content, delivered in the same easy-going manner

Feel the money

Banks should acknowledge that 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’ approach to “personalisation” in CRM and customer engagement feel archaic. Banks need to reassert their enabling role in people’s lives.

Endorse wellness

Financial wellness is more important than ever – especially for those with big student loans, those starting their first jobs, and those moving away from home for the first time. Banks must look beyond the numbers and to reframe their products and services as foundational to customers’ wellbeing and lifestyle goals.