TikTok “finfluencers” are continuing their rapid rise and they cover anything from how to get a mortgage to personal finance issues, but one area that is still under the radar seems to be peer-to-peer lending.
Research that was published last year found that a fifth of young people use social media for financial advice. Another survey, conducted by GoBankingRates, found that 39 per cent of those under the age of 24 learned about personal finance from TikTok, YouTube or other social media outlets.
The finance hashtag on TikTok has had 7.5 billion views. While the p2plending hashtag has had 3.5 million, most of the videos themselves do not have more than 100 viewers, with a some having a couple thousand. In comparison, the cryptocurrency hashtag has 6.8 billion views and the stockmarket hashtag has 3.3 billion views.
According to Deborah Boyland from marketing firm Fintech Content, the most popular type of content on TikTok is on investments, so there seems to be a gap in viral P2P finance-related content.
In addition to influencer content on finance, TikTok is also emerging as a new channel for advertising for many financial services firms.
But why would fintech companies want to be on TikTok?
“It’s current, it’s what’s being used today, and the ad costs are incredibly cost-effective,” says Boyland. “It’s uncharted waters for a lot of the banking world, but for other industries, the stats are clear. The cost per click of TikTok ads is insane, I haven’t seen anything like it. It’s like a fraction of the cost of other channels. And the engagement. Wow! People actually watch the ads, enjoy them, comment on them. It’s like a whole different advertising world.”
Unfortunately, using TikTok to advertise P2P lending is a bit more complicated due to marketing restrictions on the platform.
Although TikTok is potentially a good avenue for customer acquisition, regulations also mean that companies and influencers need to walk a fine line when it comes to social media promotion.
The Financial Conduct Authority recently issued a warning on high-risk investment products being marketed on social media.
Earlier this year, the regulator banned investment app Freetrade from using paid-for social media promotions and remove all existing paid-for promotions from its social media channels due to concerns over its partnership with a well-known “finfluencer”.
The ban came amid increasing concerns over the role of finfluencers in marketing to vulnerable consumers – particularly regarding crypto-assets.
Last year, TikTok banned financial services ads and branded content.