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Funding gets grave about viral spread

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By Anna Errera

Text: File image: File image: Smartphone displays the Klarna logo in this illustration

©Reuters/Dado Rovich
FILE PHOTO: FILE PHOTO: The smartphone displays the Klarna logo in this illustration

LONDON (Reuters) – Ian Rogers used to be responsible for the digital strategy of luxury fashion group LVMH. Now he has a unused mission: to sprinkle some driven sparkle on French cryptocurrency firm Ledger.

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

FILE PHOTO: FILE PHOTO: Silhouettes of moveable users appear next to the Instagram logo drop screen in this photo illustration

©Reuters/Dado Rovich
FILE PHOTO: FILE PHOTO: Silhouettes of moveable phone users appear next to a screen projection of the Instagram logo in this photo illustration

“The Ledger product is well designed: it has the best protection and thoughtful security,” said Rogers, who started his career as a webmaster for the Beastie Boys website and later became CEO of headphone maker Beats.

Logo: FILE PHOTO: FILE PHOTO: The TikTok logo is displayed on the smartphone in this illustration

©Reuters/Dado Rovich
File image: File image: The TikTok logo is displayed on a smartphone in this illustration

“What it doesn’t have is the go-to-market approach that looks like it was implemented by Nike or Apple. That’s what we need to do.”

Fintechs uses popular investors, social media influencers, and flashy campaigns to make online checking accounts and loans more glamorous and attract the attention of potential customers.

“When Nike drops unused sneakers or when Spotify launches an interesting unused product, but when we add an alternative payment method that’s not that interesting to consumers,” said David Sandstrom, chief marketing officer of Stockholm-based Klarna.

“If we can partner with powerful influencers, we can arrest the attention of audiences whose interest is very firm to understand.”

Klarna, which has just bought influencer marketing software company APPRL, has been one of the most eminent pioneers of this strategy.

She launched campaigns with hip-hop star Snoop Dogg, and most recently partnered with rapper A$AP Rocky who became a contributor and “CEO for a Day”.

In a June ad that garnered 4.8 million views on YouTube, A$AP Rocky roams the streets in a purple robe and slippers, until he finds a phone with the Klarna app on it and uses it to purchase clothes to restore his “pre-lockdown” look.


But making financial products go viral in a highly regulated industry is firm.

In December, UK ad watchdog banned Klarna’s Instagram influencer campaign to “irresponsibly” urge customers to use “purchase now, pay later” services.

“Brands have to remember that finance is a regulated industry, so beyond basics like asking influencers to tell consumers they are getting paid to say X or Y, they need to look at the regulatory framework,” said Sarah Kociansky, head of research at fintech. Consulting 11: FS.

Klarna’s Sandstrom said the company is working to inform financial and advertising regulators with more details about its products and services.

Video: Vontobel CEO Sees Some Wealthy Clients Allocating Cryptocurrency (Bloomberg)

Vontobel CEO Sees Some Wealthy Clients Allocating Cryptocurrency

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

Some social media companies are getting stricter about what financial products can be promoted on their platforms and how. In May, TikTok updated its Branded Content Policy to forbid the promotion of financial services and products by influencers globally.

But TikTok still allows financial brands to contract influencers to appear in their ads.

The majority of Generation Z uses Instagram and TikTok for information about personal finance, based on a study by Qualtrics commissioned by personal finance fintech Credit Karma.

“When it comes to finances, sometimes things are received more well when it comes from your friends and peers than your parents,” said Charlie D’Amelio, a 17-year-old American influencer with over 120 million TikTok. Followers.

D’Amelio, an investor in teen banking app Step that she has 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.

“Financial services used to be just where your paycheck went and you went to the branch to get cash or to deposit a check,” said Step CJ MacDonald, CEO. “Now it’s part of your day, paying bills, receiving money from friends. It really becomes a part of your lifestyle, we just tend to.”

Finding the GEN Z مفتاح key

For larger fintech companies, these unused strategies may be a way to appeal to younger audiences following gaining market share in other demographics.

Oakland-based Credit Karma, which has grown from a free credit score provider to offering financial products including checking accounts, says it’s registered as one in two American millennials.

Credit Karma is now looking to reach Gen Z – 18-25 year olds. As part of this batch, it has teamed up with video streaming platform Vevo to sponsor a series of live performances by artists with a powerful Gen Z fan base, including Billie Eilish and Ariana Grande. The company has also recently become involved with influencers on TikTok.

“Just like we’ve done with millennials, we want to meet Generation Z wherever they are,” said Polumi Damani, general manager of assets and tax at Credit Karma. “This is an area that we really want to fully own, and it’s an area that will watch us multiply.”

Major banks and finance companies have started to succeed this trend with mixed results.

Britain’s NatWest bank worked with influencers to post content on social media promoting its digital banking app Bo’ in late 2019, but then canceled Bo’ following a slow start.

The big interrogate is whether popular backers can aid young fintech firms triumph the battle against established players, whose clients may prefer to stick with the traditional bank they already have a relationship with.

“If you can penetrate a lifestyle brand, and people think they are part of a community, you can pay more,” said Mike Abbott, head of global banking at Accenture. “But to the extent these strategies are effective (against incumbents), time will tell. Convenience outweighs effect every time.”

US banks created peer-to-peer payment app Zelle following moveable payments company Venmo launched PayPal in the US as a way for people to send money to each other.

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

As they mature, some fintech companies have shifted towards a more traditional marketing approach.

British payments company Wise experimented with shock tactics in its beforetime days, with anti-bank ads and flash crowds all over the City of London.

Since then it has become an understatement.

“You might remember we were running naked outside the Bank of England to expose the hidden fees of the ‘Nothing to Hide’ campaign,” said Cian Weeresinghe, Wise’s chief marketing officer, which was made public earlier this month.

“People are still talking about it today which is distinguished. But it’s only natural that the way we market grows as we do.”

(Reporting by Anna Errera in London. Editing by Rachel Armstrong and Jane Merriman)


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