Beyond the meme: finance gets serious and goes viral

LONDON, July 29 (Reuters) – Ian Rogers was previously in charge of digital strategy for luxury fashion group LVMH. Now he has a new mission: to sprinkle some ambitious glitter on French cryptocurrency firm Ledger.

Rogers’ new role, transforming Ledger into a mainstream brand with viral potential, shows how young consumer finance companies are not only embracing the latest social media channels, but also choosing executives and marketing strategies more often associated with lifestyle brands.

“The Ledger product is well designed – it offers the best, most thoughtful security,” said Rogers, who began his career as the webmaster of the Beastie Boys website and later became general manager of the headset manufacturer. Beats.

“What it doesn’t have is a go-to-market approach that seems to have been done by Nike or Apple. That’s what we have to do.”

Fintechs are using famous investors, social media influencers, and flashy campaigns to make online checking accounts and loans a little more glamorous and grab the attention of potential customers.

“When Nike releases a new sneaker or when Spotify launches a new product it’s interesting, but when we add an alternative payment method that is not attractive to consumers,” said David Sandstrom, Klarna Marketing Director, based in Stockholm.

“If we can partner with powerful influencers, we can capture the attention of an audience whose attention is very difficult to capture.”

One of the most prominent pioneers of this strategy has been Klarna, which recently acquired influencer marketing software company APPRL. Read more

He started campaigns with hip-hop star Snoop Dogg and recently teamed up with rapper A $ AP Rocky who became a shareholder and “CEO for a day.”

In a June commercial that got 4.8 million views on YouTube, A $ AP Rocky wanders the streets wearing a purple dress and slippers, until he finds a phone with the Klarna app. and uses it to shop for clothes to regain her “pre-lockdown” look.

IRRESPONSIBLE?

But making financial products go viral in a heavily regulated industry is tricky.

In December, the UK advertising watchdog banned an influencer Instagram campaign by Klarna for “irresponsibility” encouraging customers to use “buy now, pay later” services.

“Brands need to remember that finance is a regulated industry, so beyond the basics like asking influencers to tell consumers they’re paid to say X or Y, they need to consider the regulatory framework,” said Sarah Kocianski, head of research at Fintech. tip 11: FS.

Klarna’s Sandstrom said the company is working to educate financial and advertising regulators in more detail about its products and services.

In June, Klarna and a group of influencer marketing and psychology experts released a white paper outlining best practices for influencers and brands to responsibly advertise online.

Some social media companies have also become more strict about what financial products can be promoted on their platforms and how. In May, TikTok updated its branded content policy to ban the promotion of financial products and services by influencers around the world.

But financial brands are still allowed by TikTok to contract influencers to appear in their ads.

The majority of Gen Z use Instagram and TikTok to research personal finance information, based on a Qualtrics study commissioned by personal finance fintech Credit Karma.

“When it comes to finances, sometimes things are better received when they come from your friends and peers than from your parents,” said Charli D’Amelio, the 17-year-old American influencer, with over 120 years. million TikTok. followers.

D’Amelio, an investor in the Step teen banking app that she’s promoted on social media, said she sticks to the products she uses and loves. Step is also backed by venture capital firm Dreamers VC of Will Smith, Justin Timberlake, as well as athletes Eli Manning and Stephen Curry.

“Previously, financial services was just where your paycheck went and you went to the branch to get money or deposit a check,” said Step CEO CJ MacDonald. “Now it’s part of your daily life, paying bills, receiving money from friends. It’s really part of your lifestyle, we’re just looking at that. “

FIND THE KEY TO GENERATION Z

For larger fintechs, these new strategies may be a way to capture a younger audience after gaining market share in other demographics.

Oakland-based Credit Karma, which has gone from being a free credit score provider to offering financial products, including checking accounts, says it has enrolled one in two American millennials.

Credit Karma is now looking to reach Gen Z – the 18-25 age group. As part of this campaign, it has partnered with video streaming platform Vevo to sponsor a series of live performances by artists with a strong Gen Z fan base, including Billie Eilish and Ariana Grande. The company also recently engaged with influencers on TikTok.

“Just like we did with millennials, we want to meet Gen Z where they are,” said Poulomi Damani, general manager of assets and taxes at Credit Karma. “This is an area that we really want to own, and an area that you will see us overtake.”

Traditional banks and financial firms have started to follow the trend with mixed results.

UK bank NatWest (NWG.L) worked with influencers to post content on social media promoting its digital banking app Bo ‘in late 2019, but then dropped Bo’ after a slow start.

The big question is whether cool celebrity backers can help young fintechs win the battle against established players, whose clients may prefer to stick with the traditional bank they already have a relationship with.

“If you can break into a lifestyle brand and people believe they’re part of a community, you can charge more,” said Mike Abbott, global banking manager at Accenture. “But as long as these strategies are effective (against incumbents), time will tell. Convenience trumps influence every time.”

US banks created the Zelle peer-to-peer payment app after PayPal’s mobile payment company (PYPL.O) Venmo took off in the US as a way for people to send money. money between them.

Zelle now processes more payments than Venmo. Users sent $ 307 billion through Zelle in 2020, compared to $ 159 billion sent through Venmo.

As they mature, some fintech companies have turned to a more conventional marketing approach.

UK payment firm Wise (WISEa.L) tried shock tactics in its early days, with anti-bank ads and flash mobs across the City of London.

Since then, he has become more discreet.

“You may remember us running naked in front of the Bank of England to expose the hidden costs of our ‘Nothing to Hide’ campaign,” said Cian Weeresinghe, chief marketing officer at Wise, which was made public earlier. this month.

“People are still talking about it today, which is great. But it is only natural that the way we market is developing as we are doing.”

Reporting by Anna Irrera in London. Editing by Rachel Armstrong and Jane Merriman

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