To earn hundreds of dollars in just a few steps, or rather #sidehustle, is a trend with 11.4 billion TikTok users engaged.
Consumers are looking for financial support, and their social channels give it to them. From financial influencers to real people’s personal finance stories—TikTok is the new go-to platform for Gen Z, but whether this is a good thing is controversial.
Suppose you filter through the deceptive passive income promises and reach Parii Bafna. In that case, you’ll find a computer science freshman, a mortgage loan processor, and one of the financial experts guiding the youth on social channels today.
Aside from her comprehensive ‘how-to’s,’ she offers followers to contact her directly with any burning financial questions they may have.
But when 311.8k followers have personal financial matters to discuss, there simply aren’t enough hours in the day. Although these time-constraint influencers are expanding access to personal financial advisors, personalization at scale is one area of growth the platform inhibits.
71% of customers expect personalization, and three-quarters get frustrated when they don’t get it. Artificial intelligence (AI) enables brands like TikTok to deep-dive into their data and understand their users’ interests. It also supports the app in sharing user-related results. But finance influencers on the platform are missing the critical data banks own, limiting them to generic support and personalization on a first-come, first-serve basis.
TikTok has been falling short, and banks need to step up. Here’s how they can learn from financial influencers and help customers with their financial health.
AI: Safe, personalized financial support for everyone
If banks and influencers want one-to-one financial support for the broader population, they must use AI. FI’s can’t live in the past in today’s digital-first world. Rather than traditional financial consumer profiling and legacy technology which averages three to five or, at best, eleven personas and buckets every other customer into the most suitable option, AI allows banks to create as many different profiles for people that exist.
In addition, AI’s ability to analyze and categorize private and contextual data—such as names versus behaviors—means banks can understand significant and minor customer issues while keeping customer privacy at their core.
For instance, say Customer A was having difficulties paying outstanding bills. Without knowing their name, banks can identify the likelihood of them paying based on the amount the debt is worth, the date of the invoice, and the unique persona’s risk profile—and not just from their credit score (if they have one).
With clean data from AI, banks can build and analyze consumers holistically while detaching personal or private information from their ‘behavioral profiles.’ Looking at their spending patterns, incomings, outgoings, and frequency allows banks to gain a real-time window into their cash flow and identify their financial capabilities without traditional credit checks or invading their privacy.
AI means banks can separate ‘personal profiles’ from ‘behavioral profiles’ and protect their customers’ private information while avoiding potential payment issues. This depth in analysis can even go as far as predicting when a customer will need financial support.
Some overlooked behavioral patterns could include ‘sporadic savers’ that are ‘financially healthy’ or ‘passive income earners’ that are ‘struggling with debt’—and that’s OK. Getting to this level of context means banks can provide advice and products that help each individual manage their finances with incremental steps. That’s where the user experience (UX) comes in.
Keep the UX simple with AI
When we discuss customers’ relationships with finances, we have to consider the digital era and how people operate. TikTok and Youtube financial influencers are gaining up to 34% of users’ trust by providing digestible video content on issues real people have experienced right to their pockets. But it also relies on customers actively searching these channels for financial support and someone already having dealt with and shared advice on the same problem.
For financial management to work, the solution must integrate with everyday life, like when you receive a calendar alert before your next meeting or a reminder that your battery is running low. These things trigger action at the moment they’re necessary and have become a norm people expect. How does it work in the banking world? Automated mobile notifications powered by AI.
Let’s say you just spent $80 on a meal and have $5 left until payday next week. You complete the payment and receive a text saying: We hope you had a wonderful meal! Did you know if you wait until XXX date for your next dinner out, you could save YYY? Or, perhaps you have customers that are overspending on restaurants: Your customers might benefit from a friendly link to tutorials on quick, budget-friendly recipes.
AI-powered banking platforms can identify customers’ income and spending habits, such as whether they spend in wholesale stores, restaurants, or supermarkets. At the same time, the frequency of purchases can help banks understand whether these ‘behavioral profiles’ are big on budgeting, have dependents, or have a family household. It’s this type of information that leads to desired personalized content. AI collates and analyzes multitudes of data from online banking, credit receipts, and retail financial products and can push the relevant notification at the right time and place for the user via AI chatbots or mobile apps.
As early TikTok creators, banks like FNB Community Bank already have millions of views on their advisory TikTok content. Once banks organize their data and understand their audience and its needs, reaching out and coordinating with financial influencers could be viable for banks with predominantly Gen Z customers. Influencer partnerships and dedicated in-house TikTok advisors could help build trust and communicate specific issues for their bank customers in a relatable way. But this relies on customers following these channels.
To best serve customers, banks must have their channels to reach out. This gives them control over a data-cleansing strategy, separate private and behavioral customer information, and the ability to embed AI into their mobile applications, providing access and support to their entire banking community. This way, financial institutions gain visibility of all customers’ financial difficulties while protecting their identities so that every individual can receive personalized financial advice.
TikTokers might have gained the upper hand momentarily. Still, AI-powered chatbots can help give trusted advice and make financial management a part of everyday life to improve our financial health.
Uday Akkaraju is the CEO of BOND.AI, with a background in interaction design and cognitive science and focuses on making machine intelligence empathetic and created the world’s first Empathy EngineTM for finance. Uday was recognized as an 'International Innovator' by the New York City Economic Development Corporation.