Fintech alone cannot save Twitter. Or can it?

Superapps still lives up to the promise of a great re-bundling of financial services. Elon Musk’s ambition to turn Twitter into a financial one-stop shop is still some way off.

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Moving fast and breaking things seemed to be a technology trend that had gone out of fashion. That was until six months ago when one of the world’s biggest entrepreneurs took over the running of Twitter after his $44 billion acquisition of the company was completed.

It’s early days for Musk’s Twitter overhaul, of course, but few would disagree that the company is in a dangerous position.

Can stock trading reverse Twitter’s ongoing malaise?

Last week, Twitter launched its first real foray into fintech.

Via an eye-catching partnership with eToro, fresh from its canceled SPAC entanglement, Twitter will now facilitate the trading of stocks and shares.

The partnership is a little tight-lipped, with the initial tie-up seemingly only starting with access to real-time prices and the ability to jump through to eToro’s platform.

More importantly, there is no immediate information on whether Twitter would make much money from the deal.

But over time, this and other financial services may well become much more deeply integrated into the Twitter proposition.

The reasons for this are twofold. A Twitter urgently needs to restart how it makes money through diversification of the product package.

Musk has seen the company he backed spend much of his personal fortune tied up in Tesla shares, through loan guarantees from banks and other investors, severely challenged by lower revenue generation.

Part of this comes from advertisers fleeing the platform following various concerns about its management under Musk. The economic downturn has also played its part and continues to weigh on ad-funded revenue models.

This has placed Twitter in critical condition and in need of a turnaround to stay solvent. That means new products.

Fintech revenues, in Musk’s eyes, may well be a key driver of this.

Social + Fintech

The confluence of social media and financial services (Social + Fintech, as called by VCs) is an interesting concept, although I have previously written about my doubts about its usefulness. Not to mention some inherent risks to both users and wider financial stability.

Combine the vast networks of existing users’ social media habits with the growing consumer interest in personal finance, and in particular investing in listed stocks, and you have a huge opportunity to rethink financial services and banking.

The Social + Fintech trend also combines the inherent risk of both the financial and banking system with the well-publicized negatives of social media.

This was most clearly reflected during the Game Stop Saga in January 2021, which ushered in unprecedented regulatory dilemma along with less than desirable behavior from consumers, many of whom lost bets they had not prepared for.

Second, financial services may well become an increasingly prominent Twitter feature due to Musk’s long-term interest in digital banking that began with the founding of Paypal and X.com.

Musk has previously mentioned several times his ambition to expand Twitter toward a kind of “super app” that would revive his long-held idea — and domain name — X.

This includes a move to include some sort of payment feature for users, as well as helping the world’s growing ranks of digital “creators” monetize their content.

In truth, $44 billion seems like a steep price to pay to get a fintech super app up and running.