Social media banking is high on the agenda of most banks, but many in the industry believe the issue is flying under the radar as mobile payments dominate the technology landscape.
With China’s mobile phone user base growing to over 1.2 billion in September, and the worldwide smartphone market up by 38.8 per cent in the third quarter of 2013, a growing number of people across Asia are conducting their banking through mobile.
This gives banks the opportunity to push the envelope on payments.
According to Neal Cross, Vice President of Mastercard Labs, Asia, Middle East and Africa, the same can be expected with the role commerce has to play on the payments landscape.
“Both these trends bring real-world assets into the digital landscape and as they start to become part of our everyday lives, they will form part of the commerce experience, very much like what mobile has achieved today.” Cross said.
Gen Y has been influential in banking’s move towards mobile, but some say the next big thing will be something else connected to Gen Y; social media.
With more customers active on social media, the potential to use this channel for banking is a theme that is not being considered enough, according to Manuel Tagaza, Head of e-channels at the Bank of Philippine Islands.
“Banks have been using social media to support the non-transactional aspect of banking. However, at a time when most banks are focusing on multi-channel and omni-channel strategies, some institutions may be considering social media as an additional distribution channel.”
On the other hand, the idea of doing your every day banking on social media is not yet trusted, as Tagaza points out concerns for privacy and potential for fraud.
“I believe that the market is not yet ready to bank via social media because of strict banking regulations and controls as well as security risks” Tagaza added.
With the threat of ‘Google Wallet’ or ‘Facebook Coin’ as potential disrupters, banks must harness the power of social media as a distribution channel, in the face of trust issues, according to Mike McCarthy, Head of Global Infrastructure Services in the Asia Pacific Region at RBS.
“The lack of social acceptance due to legitimate privacy concerns may limit the uptake on biometrics in the short term, but many of us can recall a time when providing a credit card number over the internet was considered a risky proposition.”
Rakesh Vengayil, CIO at BNP Paribas makes the case for perfecting technologies which are currently dominating the space across the Asian sector, saying, “The advantage we have with existing technologies is that these are tested and are more reliable.”