The Potential of TikTok in Financial Services
By Heinrich Smart on Tuesday, 30 August 2022
After its global user base increased by 1,157% between 2018 and 2020, TikTok grew from 689m users to surpassing 1bn in September 2021, making it the 7th most popular social network in the world. Whilst you may think it’s an app catering for a younger demographic, with 25% of its users in the U.S being 10-19, 20.3% of users are 40-49, and 11% are 50 and over. Proving that TikTok is grabbing the attention of audiences of all ages.
We understand that when it comes to the world of finance, there are often several compliance and risk hurdles to climb when activating any new social platform, which has led to financial firms playing it safe with those that feel suitably ‘tried and tested’ and often being the last to adopt new channels. So, we certainly don’t blame the world of financial services for disregarding TikTok as simply a social media network for teenagers to dance on and perform challenges. Whilst this might be a fun pastime (new office TikTok Thursday challenges?), the app has proven itself to be more than just a social platform for creating entertaining content - it’s an engaging tool that has been shown to inspire and educate audiences.
The rise of TikTok in Finance
NatWest and RBS, two of the largest retail banking names in the UK, partnered with TikTok to reach out to their younger demographic. Through in-feed ads they promoted their student account and the incentives alongside them. The result was 6.8m Impressions, a 5.57% engagement rate and a 1.13% click-through rate, showing that their TikTok strategy was reaching their intended audience. All that was needed were a few well-positioned ads leveraging a recognisable social trend, such as the ‘Expectation vs Reality’ concept, below.
Power of the hashtag
The hashtag has come a long way since its popularisation by Chris Messina on Twitter in 2007. Originally serving as a beacon for users to find topics in which they are interested, they have become a social media strategy essential, helping influencers gain more followers and providing marketers with a way to gain more exposure for their brand. TikTok has taken the hashtag further, not only using it to build marketing campaigns, but also to involve and challenge users.
For example, in 2021, Sage, a business management software platform, launched the #BOSSIT2021 campaign. It invited SMB owners and entrepreneurs to create short videos showing how they had been thriving that year, despite the challenges brought on by the pandemic. Within a month, 1 million people had shared the #BOSSIT2021 challenge, showing the amazing recognition social media can give a business, but also the respect and consideration a brand can show their clients.
Having seen how they can support a marketing campaign, let’s have a look at the innovative force that makes the Tik, Tok: Creators.
Since the pandemic, the number of content creators has soared, with more than 50 million people worldwide considering themselves creators. No longer is influencing reserved for semi-celebrities on yachts. People across all sorts of industries are creating content, from make-up artists to footballers, from dancers to bakers. Video recording device? Check. Social network account? Check. Let's make some content!
Businesses have caught on to the rise of creators and have begun utilising them in their marketing strategy. According to Hootsuite, businesses are set to spend $15bn on influencer marketing in 2022, so there is clearly a lot of potential for creators as promotional devices. But, how can a group of people who are known for selling products and aspirational lifestyles be applied to Financial Services?
There are creators with accounts solely dedicated to financial literacy, aptly named ‘fin-fluencers’. Creators such as @aashsthapa on TikTok or @meaningfulmoney on YouTube use their social presence to educate and guide on various financial topics, from how to avoid bad credit to investing. Arguably, this is helping to bridge the Advice gap, resulting in younger audiences (who may not be in a position to seek the help of a financial adviser), being able to improve their financial literacy. They aren’t selling products but are instead educating; an incredibly difficult and much-needed role in the world of finance. This creates an excellent opportunity for people to learn about the types of financial services available to them, and from which firms.
For example, Investment advisers Wealthfront partnered with 15 fin-fluencers such as Haley Sacks, to sponsor them on TikTok by promoting their services, and the benefits. The hashtag for Wealthfront has now amassed 4,449 views on the platform, giving them a wide range of exposure to potential, and otherwise missed clients. And while not all financial content creators are of a high quality, employing or influencing them in turn is a significant new option for the industry.
Kate Wauck, Wealthfront’s chief communications officers, said; “Quite frankly, they’re just better at telling our story than we are”
It’s difficult these days to be awake without being online. In the UK, internet users from 16 to 64 are online for an average of 6 hours and 12 minutes. Globally, the average is 6 hours and 58 minutes. Social network platforms are becoming increasingly integrated into the everyday online life of users and those platforms, with 4.70 billion social media users around the world, spending an average of 2 and half hours a day logged on. TikTok is increasing in popularity, slowly becoming the platform of choice for audiences of all ages. On average, users spend almost 24 hours in a month on the platform.
As one of the fastest growing platforms, and a place where users spend so much time, TikTok could be the perfect place for financial firms to reach out to new audiences. It is evident that it can be an effective marketing tool, and with fin-fluencers gaining increasing credibility and reach, they can act as the perfect spokespeople that financial firms can lean on to increase brand awareness and build trust.
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