GUEST POST: FinTok: How TikTok Helps People To Use Cash Wisely
TikTok is one of the well-known applications which is used worldwide and is famous for its lip-syncing videos. The social networking app, which allows users to create and share one or more 60-second videos soundtracked with music clips, will have received more than 2 billion downloads worldwide by 2020.
With a strong reputation in the financial world for encouraging volatile activist investing and cryptocurrencies, TikTok has helped to increase interest in Dogecoin and GameStop. They are nothing but the two companies that have benefited from the TikTok app. Apart from the funnier side of TikTok, there is a wealth of practical finance – that lets people use the money better.
The financial space on TikTok seems to be growing globally and is abbreviated as FinTok. Here, the content which is tagged along with the hashtag #stocktok that received views of about 1.4 billion times. However, the next hashtag #PersonalFinance has got more than 4.4 billion views.
In this article, we will cover up why TikTok is a big deal for financial purposes.
Why TikTok For Finance Matters?
Every day, nearly a billion people use TikTok’s app, with the majority of them (70 percent) being under the age of 24. Because of the large number of people who share and watch content, the variety of content available is incredible. Besides being a great place for dance challenges and funny videos, TikTok is also a fantastic tool for bite-sized learning and developing life skills in a fun and engaging way.
After graduating from high school and entering the workforce, the older half of Generation Z is becoming increasingly interested in personal finance and banking, as well as mortgages and even investment. We’ve seen an increase in finance-related content on TikTok, with fintech companies getting involved. Also emerging are the so-called ‘fin-influencers,’ who are content creators who specialize in personal finance, money management, or investment-related topics.
How FinTok Works?
People are thinking about their money, and how to make it work for them, earlier and with greater care than they have in the past. Not the content of these videos, but their reach, is what is most impressive about FinTok: it is reaching young people who may otherwise be uninterested in personal finance and encouraging them to engage with it.
Several people have even taken their initial steps into investing as a result of brief videos they’ve watched on social media platforms. For many millennials and members of Generation Z, TikTok is their first and only source of information about money and financial matters. Let’s see some of the best examples of this FinTok.
Ava Montgomery, a 17-year-old YouTuber, discovered personal finance when one of her favorite creators on the site moved their content to FinTok. Many of their videos are advice-based, and a significant portion is devoted to financial matters on receiving more likes on TikTok. Even though she is still in the sixth form and not yet at the stage of life where she can take action, she has already gained valuable knowledge about credit and mortgages while scrolling through her smartphone.
What Are Some Tips And Advice On FinTok?
TikTok recommends users the videos based on their past interactions and the idea behind it is the TikTok algorithm. And this is a complete process done by the TikTok For You Page(also called FYP). Even if you only use the platform for entertainment purposes, the platform’s random feed means you may find yourself unintentionally engaging with educational content.
Laura Pomfret states on why she loves TikTok and she is none other than the one of the founders of the brand “Financielle”. At the very beginning, Laura and her sister Holland expanded their brand on Instagram but now they have utilized the TikTok space also. However, they explain the content in a very good financial spin via the latest trends and songs in TikTok.
A younger creator, @pokubanks, sees his platform as a place for education as well. Since starting to make personal finance videos on TikTok in January 2020, David Poku, 20, has amassed a following of more than 330,000 people. His fascination with money began “as a result of a lack of financial literacy education in school,” he claims in his biography.
His sixth-form education brought him to the realization of the fact that he had never been taught about taxes, investing, or debt. He self-taught himself and enrolled at the University of Nottingham to pursue degrees in finance, accounting, and business management. And he also reveals that he makes some of the contents from his lectures.
Poku’s typical video takes a conversational, question-and-answer style, which is a good way of interaction. In the scenario of the crypto currency crash, Poku made a video on “naive investor” where he wore the black tracks with a plain fitted T-Shirt. He looked into the question of whether people who had purchased cryptocurrency should sell their coins at a low price or whether they should ride the wave of speculative activity.
Andra Maier, who resides in London at the age of 27 turned to TikTok for advice on how to manage her finances better. She exclaims that most of the contents on the For You page is all about the financial services. Rather than individual influencers, Maier recalls specific helpful videos that she has seen.
She recalls that one of the creators demonstrated how to use a Google Form for budgeting, prompting Maier to wonder why she never used this before. Before the session she used this process just to create budgets, which helped her in many ways. The girl used to note all the progressions in the google form for every single category.
What To Bear In Minds Of People About Videos?
However, these straightforward and brief FinTok videos are not universally embraced. Matthew Flower, from the place called “Saffron Walden”, is 37 years old, making him a decade older than the average TikTok user. He initially downloaded the app “to keep up with what my children are doing online,” but ended up discovering the app’s many personal finance videos as a result of his research. He’s not a big fan of mine. And he says that all of them are terrible in his point of view.
One issue for FinTok users in the United Kingdom is that the vast majority of the content is from the United States. Flower explains that there is no difference between our financial systems”. However, he believes that the greater problem is that people may take influencers’ “statements as fact, without conducting their due diligence.”
Nigel Frith, talks about the emergence of online platforms in Wall Street or the London Stock Exchange.”The dangers of having such a low barrier to entry, however, are something he is also concerned about.
To begin posting videos to TikTok, all you need is the TikTok app on your phone. In addition, the FYP can go viral more quickly than other social media platforms, according to its creators, allowing information to be viewed hundreds or thousands of times without the need to gain the trust of a large number of followers.
In personal finance, there are a lot of complications with influencers in other genres because there is a risk that they will engage in market manipulation by providing tips that benefit their investments, which could result in their investments losing money.
Streeter, of Hargreaves Lansdown, believes that it is difficult to determine “the motivations of these people” on social media. If something is not right, she says, “it is not easy to criticize an influencer at the moment.”
TikTok stopped the promotions regarding financial services and products, which included everything from cryptocurrency to debit cards, and that the ban was effective immediately. Although the scope of the ban is currently unclear, it does indicate that TikTok is taking steps to reduce the amount of potentially harmful content on the platform.
Personal finance campaigner Myron Jobson of the website Interactive Investor says the change “will hopefully signal the end of doubtful advertisements for high-risk investments, as well as highly volatile cryptocurrencies. And finally it is also useful to detect the content that seems like a weed, helping companies regarding the revised content policy.
According to TikTok’s policy, keeping people safe regarding content is considered the top priority. and that is why the company launched the #FactCheckYourFeed campaign in October. When it comes to financial advice hashtags, it posts a public service announcement, reminding users.
Even if the rules are a little bit hard for the future, FinTok is going on its peak. The viewers and the influencers watchout TikTok as a useful thing for the vital knowledge gap for the UK’s youth, and many creators such as @financielle and other examples mentioned can act as real time examples for financial management.
Finally, the personal finance videos in the wild west suggest managing finances in just simple steps: A complete research on what we are about to do and progressions moulds a positive outcome and however people do love the way of acquiring and managing their finan