How do you deal with other children?: Regulatory authorities want to strengthen the bona fides with young investors

greetings from London, reader!

I am the new (ISH) banking and fintech reporter of the FT, a role in which I will deal with topics that range from “buy now, pay later” and the future from cash to stable coins and green fintech. As Imani said in the newsletter of the past week, I am happy to turn it out with her alternately.

In this week, the asset management reporter Joshua Oliver has an excellent insight into the efforts of the financial supervisory authorities to finish with the children, while I spoke to Zilch, whose assessment last week to 2 billion. Thanks for reading.

If you want to get in touch with me, my mailbox is very open to all tips, comments, concerns, suggestions, recipes and errors. Please send me an email to sid.v@ft.com.

Why does the Sec chairman Gary Gensler have a YouTube show?

The regulatory authorities on both sides of the Atlantic have increased their efforts to communicate on the social media channels that search young investors for financial tips.

The British financial supervisory authority Financial Conduct Authority launched an online marketing campaign worth £ 11 million last month, which is intended to get stubborn young people deeply breathed in before they have money behind Squid. Coin or leveraged bets on Gamestop.

The first wave of FCA content includes online videos and a Tikok-Werbung , With graphics that are great Mario Bros on the Game Boy Color (maybe the last time that some FCA officials played a video game?).

It is easy to make jokes about the somewhat tricky offer of the regulatory authority for fame on social media, but the advertising campaign is part of a consistent strategy for investments in retail. The watchdog wants around 1.7 million more people to invest their money by 2025. He recognizes that investment platforms and robo-advisor make it easier to invest.

The regulatory authority, however, is also concerned that the “frictionlessness” for user -friendly apps makes it too easy to make the wrong decisions. His investigations suggest that millions of British investors have increased their commitment in risky investments during pandemic.

"I think Fomo is very real in this context," said Sarah Pritchard, Executive Director of Markets at FCA

The FCA examinations have focused on a cohort of excessive risk carriers, which are younger than most investors. The FCA stated three quarters of the under 40 year olds who invested in risky products such as crypto and forex to be driven by the competition with others. 58 percent stated that they were influenced by social media.

"We fear that we will not reach this target group," said Pritchard. "We do not communicate about the mechanism that they use and which affects them."

This will change because the regulatory authority will enter the footsteps of several start-ups that have continued to focus on social media and influencer marketing this year and aim at the next generation of savers.

A similar logic seems to be at work in the US stock exchange supervisory authority Securities and Exchange Commission, where the chairman Gary Gensler started a YouTube show.

"Office Hours with Gary Gensler" has published eight episodes since the end of July and shows the leading US finance supervisory authority that explains topics such as dealing with the SEC with cryptocurrency or the use of machine learning in trading apps-in three minutes or less.

The Sec said Gensler is working on "talking directly to everyday investors about topics that are important to them".

to find out how the target group of the supervisory authorities sees the social media offensive, Fintechft spoke to influencers who have built up a large online followers that talks about personal finances and investments.

The attempt by the FCA in relation to the tictok relevance was assessed by these content manufacturers as passed. Mark Ross, a 23-year-old Tikoker from Glasgow with 119,500 followers, said that the FCA had "actually made a pretty good attempt", while influencer Elvire Mattu from East London called it "short, biting and somewhat engaging".

The ratings are less friendly for Gensler. Ross called the second chairman "a middle-aged monotonous man who emits financial jargon".

"There is a lack of charisma," said Ross about Gensler's YouTube presence.

Preston SEO, a US influencer, whose Legacy Investing Show has 10,000 YouTube subscribers compared to 6,630 of the SEC, agreed that the videos were "dry", but it was of the opinion that the supervisory authority made the right sound and let the viewers know that the SEC is on its side.

Matt Morgan, a 22-year-old with half a million tictok followers, was a spitzer. "Nobody knows who 'Gary Gensler' is, why is his name mentioned in the title?" He asked.

Maybe hard, but a striking memory that the regulatory authorities in the Golf and Financial brands - have to beat a bridge if they want to find the new generation of private investors. (Josua Oliver)

Quick-Fire Questions and Answers

Every week we ask a rapidly growing fintech to imagine and explain what it distinguishes in an overcrowded industry. Our conversation, easily edited, appears below.

I recently spoke to Philip Belamant, CEO and founder of Zilch, a BNPL company based in London, a double unicorn assessment of 2 billion last week. Other existing investors are Goldman Sachs with a total of $ 400 million. Belamant, who founded the company together with his father Serge and Sean O’Connor, built up on his experience in developing a similar product in Africa.

can you talk about the fundraising round and the evaluation? What we are most looking forward to is the speed we did with. We have achieved it in about 14 months, that's the fastest thing we have seen from Europe so far. We experienced enormous growth - all hands on deck, grown from 25 to 210 employees, which was pretty phenomenal.

Which trends did you see in the BNPL sector?
Although the gene Z is the largest regular customer trunk, we actually see that the population of the 35- to 45-year-old is growing. There is this firm conviction that BNPL serves for discretionary purposes - such as buying something from JD Sports or Boohoo. With regard to use, it is really interesting that consumers also use zilch for non-discretentionary expenses such as food. If we look at open bank details, we can see that people might go shopping twice a week. Customers can buy a larger load and pay over time, which shows the clear advantage of cash flow management.

How does the British BNPL market do the worldwide?
At the moment we are the third largest e-commerce market in the world. The United States probably comes first - it is really between you and China. In the UK, BNPL penetration is currently around 4 to 5 percent compared to 1.7 percent in the United States. Therefore, today we are one of the leading markets for market penetration, and acceptance and growth are certainly one of the fastest that we have seen worldwide.

In view of the fact that the government opened its consultation for the regulation of BNPL in the past month, you are concerned about the effects of regulation on the business?
at BNPL there are so many incarnations of this matter that they have to take everything into account from catalog purchase to something like Zilch. It is a huge task to do this right. If you do something here, you can influence a number of companies somewhere else. We are not among the companies who welcome regulations because they told us - we just think that it is good for the consumer. Today we are one of the very few regulated BNPL providers in Great Britain. But we don't want over -regulation and a return to more expensive loans. The regulatory authorities have to ask themselves: "How do we make this in a relationship with BNPL?".

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