Social media in fintech is a huge issue and cuts right to the core of how the latter has revolutionised financial service. Both are all about democratisation and giving individuals greater power. Social media gives people a voice, with billions using X, Instagram, TikTok, and others to express themselves and reach others. Fintech works similarly, with many tech solutions designed to give people greater transparency and direct control over their finances (saving, banking, insurance, crypto and investment). The two are increasingly combining, with social media shaping fintech and opening it up to new audiences.
In January 2021, word spread throughout the DIY investor community in the US about the struggling video game store chain GameStop, with the consensus it was undervalued. This primarily took place on Reddit, where momentum developed, spreading around social media, and soon, the trading strategy to short GameStop shares went viral.
The result was astounding. By mobilising investors on social media, investors seized upon GameStop shares and forced its share price to soar to $500—nearly 30 times its valuation of $17.25 per share at the start of the month. Furthermore, institutional investors in the stock lost billions. That was just the beginning; regulators soon stepped in, and congressional hearings were arranged to scrutinise market practices.
The lesson was clear: social media could no longer be ignored in finance. This also opened the industry’s eyes to how active the online community of trusted fintech influencers is. TikTok financial creators and those creating content on YouTube, Instagram, X, and numerous other platforms could no longer be ignored and could move the dial regarding market behaviour.
At its most basic level, social media is a way to share and communicate information, so it’s no surprise that this has become a conduit for ideas and tips on finance. Fintech user engagement has thrived on these social media platforms, and it was only a matter of time before influencers in financial education arose.
Engaging with financial markets can be daunting, so many people have gravitated towards influencers who can easily break down concepts, explain how things work, and even give helpful advice and tips.
This means financial influencers are now heavily relied upon by investors, and this is particularly prevalent among younger generations. In a recent survey, the FCA found that 85% of young investors regard social media platforms like YouTube, TikTok, and YouTube as highly influential in their investment decisions. Of these, 43% admit that these platforms are their primary research tool.
According to the customer engagement platform Emplifi, these influencers have been growing their audiences. Between April 2023 and April 2024, follower numbers of financial influencers on Instagram and YouTube recorded double median growth. In particular, the most significant financial influencer Instagram accounts (more than 100,000) recorded nearly 15% median growth over this period. Meanwhile, on YouTube, financial influencer accounts recorded 8% median subscriber growth compared to 4% for other channels.
Unsurprisingly, fintechs are capitalising upon this, and a surge in social media fintech advertising has occurred in recent years. These platforms are a great way to communicate with customers and spread brand awareness, but many are now going further and partnering with financial influencers.
Creator-driven fintech campaigns are taking various forms, and providing education can be a very popular way of connecting with more people. A common strategy for TikTok fintech campaigns is to quickly grab a person’s attention with a common problem such as “want to buy that first house but not even enough savings to cover next month’s rent” or any other evocative statement. TikTok creators are fantastic at quickly and concisely generating engagement with their followers, and they can do this to identify a person’s financial problem, highlight how financial services can help and then put that person in touch with the fintech’s solutions.
This is now expanding, and every month, more fintechs publish TikTok finance tips, promote savings via social media, and carry out all other kinds of content campaigns through these financial influencers. Engaging Gen Z in fintech is also growing as a trend. Many young people face challenges previous generations didn’t, such as soaring inflation and a sustained cost of living crisis.
However, while social media may be a natural way for fintech solutions to market and expand their reach, they must do so cautiously. Financial services remain a highly regulated industry, and financial promotions must be clearly labelled as such, with all the required disclaimers and T&Cs included. This is a challenge given social media’s short-form structure for content. In 2024, the FCA issued 38 alerts against social media accounts operated by finfluencers due to concerns about these promotions. This served as an important reminder that, regardless of the communication method used, fintech firms and finfluencers alike must be careful about the impacts they can have.
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