For a long time, the joke has been that more and more consumers are getting their financial advice from social media platforms like TikTok. Now there is data to turn that joke into reality. Social media platforms have evolved from entertainment hubs into trusted sources of financial advice, especially for younger generations.
The big picture: Algorithms are now at the forefront of financial literacy, directing millennials and Gen Z consumers to bite-sized financial education on platforms like TikTok and Instagram. According to a PYMNTS Intelligence report, 79% of these younger users rely on algorithm-curated advice, marking a significant departure from traditional sources like banks or financial advisors.
- 62% of Gen Z identifies TikTok as a key resource for financial knowledge, showing how engaging content is making complex financial concepts more accessible.
- Digital personalities, or “finfluencers,” are becoming pseudo-advisers, influencing the financial behavior of 34% of Gen Z, often with mixed results.
What’s next: In response, banks and credit unions are reimagining their roles, shifting toward more personalized financial guidance. The report notes that 53% of U.S. retail banking consumers now seek financial advice from their banks, up from previous years.
- Partnerships with FinTechs like Astra and Till Financial are helping banks engage with younger consumers through faster payments and collaborative family banking tools.
- Financial institutions are increasingly leaning into education-first strategies to combat misinformation and strengthen trust among consumers.
The social media revolution in financial advice is not just a passing trend – it’s reshaping the financial landscape.
The rise of finfluencers isn’t without risk. Unverified financial advice online can promote myths or even scams, leading to severe consequences for consumers. Regulatory bodies like the Financial Conduct Authority in the United Kingdom are actually stepping up efforts to combat deceptive financial promotions.
