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Rob Rubin (00:00):

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(00:21):

Hello everyone and welcome to the Banking and Payment Show, an EMARKETER podcast, made possible by Nielsen. Today is November 13th, my birthday [00:00:30] week. I'm Rob Rubin, head of Business Development at EMARKETER and your host. Today we're talking about MrBeast Financial. Jimmy Donaldson, who is also known as MrBeast, is the world's most popular YouTuber. And he's entering finance. His company filed a trademark for MrBeast Financial, which is described as a mobile banking app offering online banking, investments, crypto, and cash advances. Targeting [00:01:00] his massive Gen Z audience, it's his latest venture after Feastables and Beast Burgers. To discuss whether or not this is a good idea, I've asked principle banking analyst Tiffani Montes and Max Willens, principal social media and creator economy analyst to join us today. I have a lot of firepower, two smarty pants, so thank you guys for joining.

Max Willens (01:25):

Always happy to be here, Rob.

Tiffani Montez (01:26):

Thank you. It's good to be here. Max, it's great to finally be able to be on an episode with you.

Rob Rubin (01:30):

[00:01:30] Yes.

Max Willens (01:30):

Indeed. Likewise.

Rob Rubin (01:31):

This is your first time. It's very exciting. This is our 62nd banking and payment show, so we got you on final.

Max Willens (01:38):

Very nice.

Rob Rubin (01:39):

Let's do this icebreaker before we jump into the topic. MrBeast is famous for giving away millions in cash and prizes to his followers. That's like his thing, so when he pivots to managing their money instead of giving it away, does that feel like a natural evolution or a red flag? [00:02:00] Tiffani, you go first, from a banking perspective, and then Max, from a creator economy angle.

Tiffani Montez (02:08):

Yay. Yeah, I guess it does feel like a natural extension, but I would say that with a few caveats. So if we think about MrBeast, he's built an enormous trust equity within his audience. He's not just entertaining people through his stunts, he's built an actual community [00:02:30] that is rooted in generosity and even transparency, and that gives him credibility advantage over most banks that have to spend millions of dollars to earn it.

(02:41):

But when I think about what his brand actually stands for, this is how I sort of equate it as it relates to money, it's a bit like handing Evil Knievel your porcelain piggy bank and asking him to keep it safe. I think there's a lot of excitement and trust [00:03:00] around his brand, but it really becomes about whether there's stability in his brand that can shift him from giving him money away to actually managing someone's money.

Max Willens (03:12):

Yeah, I feel like this is definitely a first for lots of reasons, but the transition from telling a reporter on the record that his mother handles his bank account to turning around and selling financial advice content has got to [00:03:30] be some kind of record in terms of leveling up one's credibility in the space.

(03:34):

I think that this is a really interesting question of whether this is a good fit for him or not. I think your point about generosity and transforming your life through giving does have some overlap with financial services, but I also think that there's a long track record already of creators trying to make forays into different financial [00:04:00] products and not really succeeding because, fundamentally, of the maybe under counted on sophistication of consumers, to what Tiffani was saying, everyone or a lot of people are willing to sort of buy their favorite creator's T-shirt or lip balm or underwear, but they are probably going to be a little bit more reticent when it comes to trusting them on payday loans or crypto or any [00:04:30] of the other things that were mentioned in that filing that MrBeast's people made.

Rob Rubin (04:36):

Let's get into it a little more and jump into our first segment, The Headlines. In The Headlines, I pick an article related to the topic and we discuss it. So today I picked an article that we published on October 21st titled YouTube Mega Influencer MrBeast Eyes Financial Services for Gen Z. According [00:05:00] to the article, which we put a link in the show notes, MrBeast Financial would flip the traditional Finfluencer marketing by selling financial products directly to his nearly half a billion followers. That's quite a large audience. So rather than promoting other services through his current channels, but entering banking and crypto trading, as we've already started to point out, presents some challenges, like regulatory [00:05:30] compliance risks, certainly the reputational hazards could dwarf his media and merchandise ventures, threatening both as brand and Gen Z trusts.

(05:40):

So I guess let's frame it. What are we talking about? Are we talking about a financial services super app that would compete with banks or is he really talking about becoming a Nerd Wallet style affiliate play that would sell Gen Z customers to other Finserves?

Max Willens (05:58):

That was my read on it, the latter [00:06:00] explanation.

Rob Rubin (06:00):

Yeah.

Max Willens (06:01):

And I say that mainly because of the phrase, "Built on top of," I think it was financial services content, which you could imagine rather than a Nerd Wallet or a Credit Karma being probably video focused because that's MrBeast's idiom, but to me that feels like a much more pragmatic use of his reach and brand than, as you say, literally getting into selling products [00:06:30] that he's tied to directly. But that's my own read on it. I'm curious to hear what Tiffani thinks.

Rob Rubin (06:35):

Yeah.

Tiffani Montez (06:36):

Yeah, I mean I sort of feel the same thing. So if I think about another player in the industry that sounded how it was described, it very much sounds like it could be a Dave, right? It could be a bank that is just building a UI layer on top of another financial institution, whether it's an institution you already do business with or an institution that maybe they go find a bank sponsor from.

(06:59):

But when I think [00:07:00] about it under the context of your question, Rob, which was about super apps, as you know, in the United States, when we use the words super app, people tend to squirm, and they will tell you that the United States will never have a super app the way that we had in the east. But beyond all of that, I do think that there is a need in the industry to solve creating one financial app that includes lots of different things related to not only your finances [00:07:30] but to your everyday life. And so I do see a world where we integrate not only financial products and services to life stage or lifestyle with complimentary non-financial services, and I think at some point that could rewire what a bank looks and feels like when you start blending financial products with non-financial products all in one place.

Rob Rubin (07:55):

It feels like, in that case, the financial institution [00:08:00] is purely a utility in the back.

Max Willens (08:03):

And that's something that they all struggle with too, right? I mean, I think a lot about what we see burbling up with financial media networks, and you think about the role that a Chase or a PayPal would like to play in the media space, and part of their path toward getting there is kind of becoming a more multivalent [00:08:30] product that serves lots of different roles for consumers and the kind of core functionality or service they provide, in some sense, is kind of retreating into the background and becoming just something that's less prominent so that if you're opening up a Chase app all the time, for example, in this more kind of media oriented future state, people are going there for deals, they're going there for content to think about where they'll plan their next vacation, and then maybe after they've been in there [00:09:00] for 35 minutes, they go, "Oh yeah, it's the 31st, I should pay my credit card," rather than that being the kind of beginning, middle, and end of the digital relationship that they have at the moment.

Rob Rubin (09:09):

What's funny though is a lot of the work that I feel like Chase is doing, what their media network is on offsite reach, because they don't probably get enough endemic reach on their platform to make, certainly for national ad national campaigns, so they really are investing quite a bit in their offsite [00:09:30] reach. So I wonder if that sort of still puts them in that utility mode. They have access to all of that reach of those customers of theirs. But what Tiffani's talking about is sort of being more lifestyle-oriented and having a front end, like a MrBeast, that aggregates this audience around certain things, and maybe he's more of an impresario, right? He's pulling all the things that Gen Z would [00:10:00] like into one place. So I call it a super app, but maybe it is, I don't know.

Tiffani Montez (10:06):

Yeah, I think it could be a super app. And to your point, it's really about curating experiences and then orchestrating the journey.

Rob Rubin (10:13):

I think so. The reason why I want to give them the benefit of the doubt, and this will be a good transition to our next segment, is that anyone that's managed to amass a half a billion users is super smart. I'm just going to start from that particular perspective, is that he has to [00:10:30] be smart. That was not an accident.

(10:32):

So let's look at some data about Gen Z in our next segment, which is Story By Numbers. And here we examine the data that's driving the story, and according to EMARKETER forecasts, Gen Z mobile banking adoption is going to grow 11.5% in 2025, and that compares to just 0.7% for millennials, and Gen X and baby boomers are [00:11:00] negatives. For digital only banks, the gap's, even starker. Gen Z adoption is going to grow 21% in 2026 while millennials actually decline by a half a percent. Gen Z is the only generation growing for digital only banks, for example. So just to talk, because we raised this initially about customer acquisition. Traditional financial services companies spend between three and $700 to acquire each new customer. So Tiffani, what drives those [00:11:30] costs so high? Where does that money actually go?

Tiffani Montez (11:33):

The money actually goes towards broad marketing and the operational overhead to support that. So if you think about things like large scale brand campaigns, direct marketing, branch signage, and even the call center staff that supports some of those marketing campaigns, there is a significant cost that a financial institution incurs as they're trying to acquire someone.

(11:59):

If we think about [00:12:00] digital-only banks, they are built for more precision as it relates to acquiring customers. They leverage more data-driven targeting. They have viral referral programs, and even frictionless onboarding that drives down the cost significantly lower than traditional financial institution.

(12:23):

But when you start to think about that, that advantage starts to narrow quickly for newer or even lesser-known [00:12:30] digital players that are going to spend a lot more time building awareness around trust and credibility, especially in categories where consumers are cautious about where their money goes and how it's being managed.

Rob Rubin (12:44):

That leads to this question for Max, can MrBeast realistically acquire Gen Z customers for less than banks through his existing channels?

Max Willens (12:54):

Well, he's certainly got a lot of raw material to work with, right? I mean, I think that the [00:13:00] number I remember is that it's a 447 million YouTube subscribers, something like that. So if he signs up, the typical... this isn't totally apples to apples, but the typical is that if you can sign up one to 3% or convert one to 3% of a free audience to a paid, that's considered pretty standard. So that would be in the ballpark of between 12 and 15 million customers. That's not a bad starting point.

(13:28):

I think in terms of [00:13:30] whether he's going to be able to do it though, it's going to really come down to a lot of what Tiffani alluded to earlier, which is demonstrating kind of credibility and trust. I mean, like you think about, even though Jimmy Donaldson is fundamentally a 21st century media creature, there have been, I guess you would call them financial influencers in the past, built in the old media era. I think about someone like Susie Orman for example, or Jim Cramer, but [00:14:00] they got where they're getting because of their bona fides, right? Like Susie Orman was a CFP and Jim Cramer used to manage a hedge fund, and-

Rob Rubin (14:08):

Dave Ramsey.

Max Willens (14:09):

Another great example. That's right. And I think that in instances where influencers that don't have those obvious markers of credibility have made forays into this space, it's typically not gone very well. I mean, I feel like the most obvious punchline of an example is the hawk to a meme coin, [00:14:30] but you've also got things like Carrot Financial, which lined up Will Smith as an investor to Hawk credit cards to influencers. That's been pretty darn quiet since they raised all that money two years ago.

Rob Rubin (14:43):

All of the celebrity meme coins, have any of them actually made money except for the people that were insiders from the start?

Max Willens (14:53):

Not as far as I can tell.

Rob Rubin (14:55):

There's a MrBeast coin, but it's not affiliated [00:15:00] with MrBeast.

Max Willens (15:02):

I bet he loves that.

Rob Rubin (15:03):

No, he doesn't. So let's jump into this. Is there a danger for cheap customer acquisition? Let's say he can acquire one to 3% easily. Are we talking about drawing young people into financial products that they don't understand because their favorite creator made it frictionless? Is that good? These are not hamburgers.

Tiffani Montez (15:30):

[00:15:30] No, it's-

Rob Rubin (15:30):

Or snacks.

Tiffani Montez (15:30):

Yeah, it's definitely not good. But what I would say is that he does have an opportunity to get scale very quickly, right?

Rob Rubin (15:38):

Right.

Tiffani Montez (15:39):

If I think about, we do a survey every year called Our US Consumer Banking Habits, which we just got back, and this is not published data yet, so you're getting the early take on this.

Rob Rubin (15:50):

All right. There you go. Listen, everyone.

Tiffani Montez (15:51):

Is nearly 25% of total respondents learn about bank products through social media. [00:16:00] If we look at Gen Z alone, that's 36% of them that find or learn about banks through social media. If we start to think about the channels that they use to research, 40% of them use social media, and YouTube is the main source that they use to look up banking information. So when we start to think about costs per acquisition and the ability to meet consumers where you're at, they're actually discovering and researching products, he's already got a tremendous amount [00:16:30] of scale.

Rob Rubin (16:31):

It's hilarious. It's so generational, because it would never even occur to me to go to YouTube for that kind of information.

Tiffani Montez (16:41):

Or any social media channel.

Rob Rubin (16:43):

Probably not. No.

Max Willens (16:44):

Yeah. Well, it's funny though. I mean, you think about, I'm sure that, Tiffani, you and your colleagues are going to run that survey on an annual basis, and I would bet that you guys are already having discussions about whether or not to include [00:17:00] ChatGPT or LLMs in that conversation.

(17:03):

And even though I think you're right that there's a lot of reasons to be skeptical of someone that you have in your YouTube feed because of weird pranks that they play selling you a credit card, LLMs make stuff up all the time, and there's a lot of reasons to be cautious there too.

(17:21):

I think it's funny to sort of, you could look at this either from the example of MrBeast in particular or the sort of model of aggregating an audience [00:17:30] and then using that as a way to explore an incremental revenue stream. And here again, because of the different media consumption habits that we're talking about, media empires are built differently. And I think that if we imagine a world where like a CFP who's really good on TikTok builds a huge audience and then starts selling access to some kind of credit union that they're affiliated with, people would go, "This is actually really kind of a commendable use of this person's power." And [00:18:00] I think we just don't know enough about how Jimmy Donaldson is going to pursue this to weigh in definitively on whether it's good or bad, but I'm excited to see where it goes.

Rob Rubin (18:13):

Yeah, I think it's going to be interesting. I want to dig into it just a little bit more with the debate that we've set up. In the debate, I've asked Max and Tiffani to take opposing positions, not necessarily their positions, just opposing positions for the debate.

Tiffani Montez (18:29):

Thank you for saying that.

Max Willens (18:30):

[00:18:30] Yes. Let's, one more time for the people in the back, this is just fun and games.

Rob Rubin (18:34):

Right.

Max Willens (18:34):

Sorry, Rob. Go ahead.

Rob Rubin (18:36):

Max is going to argue that the reverse influencer model will truly disrupt traditional banking, and Tiffani's going to argue that MrBeast Financial will be a Gen Z Nerd Wallet, basically. Not a Finserve Super app. So I'm going to give you each about a minute and then we're going to discuss. So Max, why don't you go first?

Max Willens (18:58):

Thank you, Rob. [00:19:00] So in my exuberance to present this argument that I completely believe, deeply, just kidding, I wanted to sort of... My enthusiasm for this idea stems from the notion that it is entirely possible that as more and more people turn to social networks to kind of acquire their own financial literacy, to develop their own portfolio of investments and think about how to manage their money, there [00:19:30] will come into being a kind of constellation of, I would hope, competent and well-wishing influencers like the 21st century's Susie Orman, again, is the person I keep coming back to, who could I think reasonably build little empires where they give people the tools to responsibly and effectively manage their money, grow their wealth, invest in things [00:20:00] that will allow them to develop sure financial footing for themselves. And so whether MrBeast Financial works out or not, I'm excited by this concept of a reverse finfluencer.

Rob Rubin (20:12):

Great. That was awesome. Tiffani?

Tiffani Montez (20:15):

I like it. Sold. Can I recommend that you do Evil Knievel with the piggy bank as the logo for this new bank?

Max Willens (20:24):

Love it.

Tiffani Montez (20:26):

Okay. So the opposite end, which again is for [00:20:30] the fun of debate. I don't think that MrBeast Financial is going to replace a bank, but I do think that there is a role for them to recommend bank products and services. If we think about creators in general, I don't think the economics work out well for them to try to run a regulated financial institution. When you start to think about compliance, know your customer, and capital requirements, all of that is expensive, it's complex, and it gets riskier [00:21:00] the further that you get into the ecosystem. Even if MrBeast was to partner with a sponsor bank, I think there's also tremendous risk in doing so. If we start to think about the years of explosive growth for the banking as a service model, I think we called in 2024, we said that banking as a service was going to experience a Milli-Vanilli moment in banking, and that is exactly what we saw happen when regulators and customers started [00:21:30] to realize how many players were involved in delivering banking products and services and how hard it was to control risk.

(21:37):

So I think even if he decided he wasn't going to do sponsor bank and decided to go be an actual bank, I think there's also risk in that, right? If we think about Borrow Bank, they're still struggling to hit profitability, so I don't think the Neo Bank one is an angle that would work well. But if we start to think about all the things that a creator is good at and what they do very well, [00:22:00] it really is about the recommendations and referrals. And so I think a smarter play for MrBeast would be to go after the Nerd Wallet, where they can really focus on content, curation, orchestration of experiences, and even affiliate monetization.

Rob Rubin (22:19):

Well, this was, I really liked, this is the first time we've done the debate. I think it's fantastic. Thank you guys for-

Tiffani Montez (22:25):

I liked it. It was good.

Rob Rubin (22:26):

...for playing along. Because you both [00:22:30] make really good points, right? Max, the idea that he could take the influence that he's making and turn it into a business that is an operating business is really interesting because there are so many partners that could work with him on it. So it's not like Jimmy Donaldson needs to know how to operate the treasury of a bank.

Max Willens (22:55):

That's right. He just has to have the buy-in and the... He lines the customers up, [00:23:00] and if he is sophisticated enough to know what it is that he wants, finding someone to sort of execute on that probably wouldn't be that difficult.

Rob Rubin (23:09):

And isn't it just like, just as I sort of pointed out that for me it never occurred to use social media to learn about financial service products. The thing that stands out to me also is that banks have no idea how to build banking products for younger people today and the way that they want to use a bank or financial services. Some [00:23:30] don't even want to have a bank account. They want different kinds of... They want to operate in a different way. And maybe MrBeast sees the opportunity to redefine what financial services are to younger people through his channels.

Tiffani Montez (23:49):

The segment that he's going after is not going to be a high-value segment for a financial institution, right?

Rob Rubin (23:55):

For a while,

Tiffani Montez (23:56):

For quite a while. And so I think could you serve the immediate [00:24:00] short-term needs of this customer base? Yes. Are you going to make a lot of money on it? Probably not. How do you keep their trust as you move to more complex life stages, where your financial needs get much more complex? Are you going to be able to deliver? As they grow up, is your brand appeal going to stick in a way that will make you want to stay with them long term?

Max Willens (24:26):

I think that's a really strong [00:24:30] point. Could they just be basically like, best-case scenario, the training wheels for financial, and then they eventually lose out to something that looks a little bit more polished? Am I doing myself a disservice by saying that I think Tiffani's argument was great? Am I basically just seeding-

Rob Rubin (24:51):

No, I was going to go there too, so it was obvious.

Max Willens (24:54):

Yeah.

Tiffani Montez (24:56):

I think I just got, I picked the right side, or I was given the right side.

Rob Rubin (25:00):

[00:25:00] You were given the right side. To be fair, to Max, I picked it. I picked the sides.

Tiffani Montez (25:06):

So really Rob wins, is what you should hear out of all of this, Max.

Max Willens (25:08):

Yes.

Tiffani Montez (25:09):

It's not about you or I.

Max Willens (25:09):

Congratulations to you, Rob.

Rob Rubin (25:11):

Thank you.

Max Willens (25:11):

Congratulations [inaudible 00:25:12].

Rob Rubin (25:12):

Thank you, guys. It's my birthday.

Tiffani Montez (25:14):

Happy birthday, you win. Do you want a piggy bank from Evil Knievel?

Rob Rubin (25:19):

He was the original influencer, in that way.

Tiffani Montez (25:19):

Original stuntman.

Rob Rubin (25:23):

Except that he didn't have any sponsorships, particularly.

Tiffani Montez (25:27):

He was not a creator because he didn't know [00:25:30] that that was a possibility.

Rob Rubin (25:32):

He didn't know. This has been a ton of fun to have you guys on the show and to talk about MrBeast. So thank you guys for doing this today.

Tiffani Montez (25:43):

Yeah, thank you.

Max Willens (25:43):

It was a pleasure.

Tiffani Montez (25:44):

Happy birthday.

Rob Rubin (25:45):

Thank you.

Max Willens (25:45):

Happy birthday. That's right.

Rob Rubin (25:47):

And thanks everyone for listening to the Banking and Payment Show, an EMARKETER podcast made possible by Nielsen. Also, thank you to our studio team that puts these episodes together. Our next episode will be on December the ninth, [00:26:00] so be sure to check it out. See you then.