BSLS2023: Thirst for mortgage info on TikTok confirms industry missing a trick – Rostrum

Sophie Placido (pictured), director of PR and strategy at Rostrum said the thirst from young people wanting to engage with their finances and understand the topic better is underexplored, considering the demographic of TikTok is continually shifting.

At the British Specialist Lending Senate in Surrey last week, she said: “It’s not just teenagers on the platform, but even with young adults, it’s about building brand trust, credibility and awareness now for when they are starting to make financial decisions, buy homes, or take out protection over the coming years.

And whilst TikTok might not seem like the obvious place to go and learn about personal finance topics, unfortunately, a lot of people feel unable to get this financial education elsewhere – and a lot of these individuals are the homebuyers of the future.”

Infinite possibility

In 2022, there were around 17.5m active users on TikTok, and that number is expected to increase by 20 per cent in 2026 to reach 21m. These UK users spend on average 41 minutes a day on the app and the demographics have a slight skew towards females, who make up 60 per cent of UK users. As a social platform, it is the third most visited channel by those aged 15-24.

TikTok’s algorithm sets it apart from other social channels – instead of promoting content from friends, it allows users to explore videos from anyone and learns what you want to see, allowing anyone’s reach to be limitless. Launched in 2016, TikTok is a short-form video only content platform, which gives users the ability to create and share videos.

TikTok also has the highest average engagement rate of any social channel at 4.25 per cent, compared to 3.16 per cent for LinkedIn, 0.6 per cent for Instagram, 0.14 per cent for Facebook and 0.05 per cent for Twitter.

Placido cautioned that Tik Tok and social media in general remains unregulated and that Mairead McGuinness, the European Commissioner for financial services warned of the risks of financial advice being delivered on platforms such as TikTok. However, she also acknowledged that the more “traditional,” more complex ways of talking about finance may not help the new generation of retail investors. Or in this case, the next generation of homebuyers, added Placido.

The mortgage advice arena

A number of mortgage advisers are already promoting themselves on the channel, but Placido said the opportunity for more diverse voices to champion advice, the sector or when partnering with creators was there for the taking.

Exclusive broker research conducted by Mortgage Solutions and Rostrum revealed 10 per cent of advisers have created a Tik Tok video for professional use and 36 per cent of brokers who use the channel find it ‘invaluable’.

LinkedIn remains the most popular channel for 70 per cent of brokers, but 24 per cent estimated up to half their clients use Tik Tok and 27 per cent think there is appetite from clients to receive mortgage information via Tik Tok. Also, 19 per cent of brokers said they’d like to see more lenders clarifying product information on Tik Tok.

Placido said the channel’s attractive qualities included the fact that 93 per cent of consumers said they turn to social media channels like Tik Tok to get questions answered about a product or service and 80 per cent of people buy products as a direct response to social media content, according to Oracle research. She added that 90 per cent of active Tik Tok users access the channel daily.

Research from Hargreaves Lansdown found that of the 46 per cent of the 18 to 34-year-olds who have become more interested in investing over the past six months, one in five of them attributed that to TikTok specifically.

Placido explained to a select lender audience at the event that social media harnesses the idea ‘social proof’ or that consumers adapt their behaviour according to what others are doing, so has the ‘bandwagon effect.’

She said: “Marketers are already using social proof as a tactic to convey trust and authority in a product or service by showcasing success stories of other customers to drive conversions. And social media channels are fantastic platforms for social proof as they help to convey the authenticity of customer satisfaction as the content is viewed to be genuine and ‘real life’.”