What is FinTok and why is it going viral?

Gen Zs and millennials are flocking to popular video-sharing app TikTok to learn money skills but users should also be aware of scams, experts say

Mark Tilbury films a video for his TikTok account. Since joining the platform 11 months ago, the 53-year-old’s TikTok account has garnered an impressive 5.9 million followers and more than 46.3 million views thanks to his focus on personal finance advice. Courtesy Mark Tilbury
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It was during a business trip to the southern Chinese city of Shenzhen in 2019 that Briton Mark Tilbury noticed “everybody” was using TikTok, the popular video-sharing app better known for pranks, dance challenges, lifestyle tips and trolling former US president Donald Trump.

Just as the world was entering Covid-19 lockdowns in March 2020, the self-made millionaire’s 22-year-old son, Curtis, thought it would be a good idea for his father to join the social media platform as so many of his friends were always asking him for personal finance advice.

Since joining the platform 11 months ago, the 53-year-old's TikTok account has exploded, garnering an impressive 5.9 million followers and more than 46.3 million views of his videos.

Mr Tilbury’s entertaining, down-to-earth financial advice – where he takes on a “good cop, bad cop” role – covers a variety of personal finance topics, such as how to avoid scammers and deal with loan sharks, the pitfalls of credit cards, the benefits of compound interest and even how to negotiate with car salesmen, among others.

With millions of Generation Z and millennials turning to social media to learn money skills during the pandemic, UK-based Mr Tilbury says the short-form video style of TikTok is the perfect platform to reach out to youth and help them understand the basics of personal finance.

“It was never about the numbers,” says Mr Tilbury, chief executive and founder of the UK-based Model World and Century UK companies, which specialise in the radio-control model sector.

“The problem is obviously with schools as they don't really teach you anything about finance. If you said to most 16 year olds, ‘What's an interest rate on a loan?’ They would probably say, ‘What's a loan’?.

“It's surprising because I thought there was more information out there than that. It's been quite an eye-opener but, obviously, the youngsters have come back,” he adds.

“There's a lot of little mistakes and potholes they are falling down along their [financial] journey and then wondering why it's not working out for them. So that's what I try and bring to the party based on my personal experiences.”

Similar to Twitter's FinTwit hashtag, the FinTok hashtag has been driven by an explosion in bored novice traders signing up for commission-free trading platforms such as Robinhood, eToro, Interactive Brokers and the UAE’s robo-advisory Sarwa during the pandemic lockdowns.

Hungry for information on trading advice, stock tips and smart money skills, novice traders have turned to TikTok, where they are pushing the FinTok hashtag to viral levels. At the time of writing, it had more than 163.9 million views, while the related hashtag StockTok was trending at 573.6 million hits and #investing at an incredible 1.6 billion views.

“Because of everything going on with the pandemic, it’s definitely a time that people are focusing more on their money,” Carol Glynn, founder of Dubai-based Conscious Finance Coaching, says.

“So many people have been made redundant. They are worried about their jobs and economies are suffering. There's so much unknown and that's when people start looking at their financial situation and looking for advice.”

Owned by Beijing-based technology firm ByteDance and launched in 2016, TikTok has about 800 million monthly active users and has been downloaded 1.65 billion times, according to the 2020 Global Digital Overview report by We Are Social and Hootsuite.

Meanwhile, 41 per cent of TikTok users are aged between 16 and 24, while 50 per cent of the social media platform's global audience is under the age of 34, digital marketing agency Omnicore says in its TikTok by the Numbers report.

However, the personal finance trend on TikTok also has its pitfalls. This has led to financial experts warning users to be aware of potential scams and predatory advertising, as well as avoiding TikTokers with no financial experience at all.

While educational content is booming on the platform, we know it is more important than ever to make sure that the information available on TikTok is accurate

One example of financially dangerous advice on the platform came from a TikToker who urged his followers to apply for multiple credit cards, max one of them out and then use the others to pay it off. In an effort to reach out to the inexperienced “Robinhood generation”, others offer stock tips for payment or ask followers to send them money so they can invest it on their behalf.

Bad personal finance advice on the platform can be a minefield for youth, Mr Tilbury says.

“They tend to believe everything they’re told to a certain degree,” he adds. “We tend to get a lot of people trying to scam our followers in the comment sections [of videos]. We spend days just deleting them and trying to hide them.

“If somebody wants you to send them money for them to invest for you, that should [ring] alarm bells.”

While the Robinhood day trading phenomenon has been present for quite a while, scammers and novice traders tend to evangelise risky investments during a bull market, says Vijay Valecha, chief investment officer at Dubai-based Century Financial.

FinTok influencer Mark Tilbury checks his TikTok account from his mobile phone. Courtesy Mark Tilbury
FinTok influencer Mark Tilbury checks his TikTok account from his mobile phone. Courtesy Mark Tilbury

“The unemployment surge during this time, with jobs lost in travel, hospitality and retail particularly, have fuelled this viral trend,” he adds.

“Playing over the opportunity cost of capital combined with psychological manipulations such as regret bias, scam artists tend to gain followers and promote risky investments. The best financial advice is based on an investment policy statement and cannot be contained in a 60-second video.”

Creating a safe and positive in-app environment for users is a top priority for the platform, Rami Zeidan, the head of video and creative at TikTok Middle East and North Africa, tells The National.

TikTok deploys a combination of policies, technologies and moderation strategies to detect and review problematic content and implements appropriate penalties, he adds. This includes a fraud and scams policy, which can be found on the platform.

“We take actions ranging from restricting certain features up to banning account access, based on the frequency and severity of the reported content,” Mr Zeidan says.

“Ensuring our users have access to reliable and accurate information is very important to us at TikTok. This is why we work round the clock to ensure we create and maintain a safe environment for our users.

“While educational content is booming on the platform, we know it is more important than ever to make sure that the information available on TikTok is accurate. This is a complex, industry-wide challenge and we are consistently evaluating and refining our protective measures in our ongoing commitment to our users.”

Nathan McFarlane, the founder of Dubai-based Help With Debt, an online platform that aims to educate and help UAE residents solve their debt issues, is a rising FinTok influencer in the Middle East with nearly 25,000 followers and more than 169,000 likes.

The former financial adviser spends up to four hours a day on the platform, engaging with his followers and filming and uploading a video once a day that primarily focuses on smart money tips.

Like most social media platforms, Mr McFarlane says the FinTok hashtag has its pros and cons.

“When there's something new out there, there's going to be people who do things for good, but there's also going to be crooks who do things to their own advantage to line their pockets,” he says.

“If TikTok is used correctly, it can educate a generation that simply weren't educated on personal finance before,” he adds. “If they go to good channels … they will [find] good information that they otherwise wouldn't have had access to.

“But the problem is when you're young, you're careless … and it's going to open up opportunities for bad people to take advantage of young people's understanding of situations. Obviously, with personal finance, that can be very bad because people [are] gambling their money away for it.”

However, Mr McFarlane believes that TikTok has revolutionised the way youth learn, giving them an opportunity to educate themselves about money and investing.

“This is an entire generation of people that realised they need to invest to build themselves a better future,” he says. “On the back of that, investing has become cool. They actively want to know about investing."

Financial literacy is essential in the modern world because it provides the knowledge and skills required to manage money effectively, says Mr Valecha of Century Financial.

While every investment carries a certain degree of risk, it is essential to understand how it works, the risks involved and the hidden costs associated with it, as well as your own risk profile and objectives, he adds.

“It is a necessity nowadays to invest in personal financial education, so that the current generation of young people grow up to be consumers who are capable of making responsible choices that pave the way to a healthy financial future for themselves and society,” he says.

To avoid being scammed and potentially losing your life savings, Ms Glynn, of Conscious Finance Coaching, says it is important to be sceptical of get-rich-quick schemes.

She recommends finding an independent adviser who has the qualifications and credentials to help with investments and financial goals, as well as doing your own research before making important financial decisions.

“There's so many scams out there and you can lose a lot of money very quickly,” Ms Glynn says.

“That can be very damaging to people, both financially and mentally. It's always good to get lots of different viewpoints, different recommendations and opinions, but [also] do your own research. If it feels like it's too much, too good to be true, it usually is.”