01 August 2014

Retail Finance

Henry Woodcock - IRESS

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Innovation in Financial Services

A discussion of trends in innovation management within financial institutions, and the key processes, technology and cultural shifts driving innovation.

Facebook and finance ... the next App revolution ?

06 June 2012  |  3301 views  |  2

Whether you are an advocate or not, it’s increasingly hard to ignore the Internet phenomenon that is Facebook;  spending  $1 billion to buy a company with only 13 employees that makes virtually no money – Instagram – and now an IPO which valued the company over $100bn - well that is now dropping away with much concern by early investors.  

With a reach across most of the world and over 840 million users, while there are good examples of innovative use by advisers and financial institutions to engage and inform consumers, one would think it would also attract financial apps.

Developers and banks have been slow to take advantage of the access and social interaction that a Facebook app could bring, especially to the mass market demographics financial institutions often target, the so called Gen Y marketplace – possibly due to concerns regarding Facebook privacy.

Of the few Facebook financial apps available, perhaps the most sophisticated is MyMoney, developed by Fiserv for Credit Unions in the US. The end user, once enrolled can view account balances, review history, transfer money between accounts and more. When selecting the app the user can choose their credit union if it is in the list or open a new account completely on-line.

Other Facebook financial apps tend to provide simpler functions such as money payments through PayPal and the Smart Saver, an app from Lloyds TSB which shares your saving goals with your friends, and even lets them chip in via PayPal.

As I researched further nothing exciting appeared until quite accidentally, on holiday at Easter in Turkey, when visiting my local branch of Denizbank I was asked why I had not yet signed up for the Facebook app?

With “Customers First”, launched in January; Denizbank are recognising that with over 31 million Facebook users in Turkey, each spending a minimum of 20 minutes on Facebook daily, this was a platform to reach out to their existing and new customers.

Denizbank have developed a sophisticated Facebook landing page to complement the app. The app provides calculation tools, management of daily banking tasks through an “Agenda” application and for fun – why not, we are on Facebook – a “Create a Fan” application which enables users to dress up the pictures of their family and loved ones with the colours of the football teams they support and share them on Facebook. Banking transactions provided include bill payment, credit card payment, FX and fund buy/sell options. With the “Customers First” application, Facebook provides Denizbank with the opportunity to engage with their followers, share their ideas, suggestions and even deal with complaints – all key to relationships and as the old adage goes, ‘people do business with people they like’ – this applies equally to banks.

A recent study by IBM – “Virtual Relationships, Why banks should be friends with social media”, suggests that Denizbank are on the money with their Facebook strategy. The report proposes that banks should consider social media banking seriously, the two key reasons being customer behaviour and the need to rebuild trust . Just like consumer driven growth in mobile apps, the same will be true of social media apps. The study suggests benefits to banks will include: brand consideration and customer recruitment, education of customers, data on customers, improvements in customer retention, and product innovation generated by the consumer.

As the momentum builds who will be successful in social media finance apps?

Where do you see the opportunities?

 

Facebook TagsOnline banking

Comments: (3)

Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune | 08 June, 2012, 14:22

As I'd written about in these two Finextra blog posts, ICICI Bank has a Facebook app and many more banks provide customer service via social media. 

Pushing The Envelope On Technology - Part 1

Gain Social Media And Lose The Call Center Hold Music

Henry Woodcock - IRESS - Cirencester | 11 June, 2012, 11:41

Fair enough comment Ketharaman, I'd not picked up the earlier article and as an ICICI Bank customer have sadly not received any information on their app. With recent worries over social media security such as LinkedIn, banks may hold back from moving further into Social Media during 2012.

Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune | 11 June, 2012, 12:54

@HenryW:

In case you're a customer of ICICI Bank outside India, the Facebook App is possibly not available for your account category, which is probably why you haven't heard about it. It's available for resident Indian savings account holders like me and I did get two emails from ICICI Bank announcing the launch of its FB app.

The ICICI Bank FB app makes you jump several hoops before you can sign up for it, effectively ruling out account  hijacking by anyone who only knows my FB password. It also demands a 4-digit PIN number for logging you in each time - this is after you've successfully logged into FB using your regular FB password. Therefore, even if someone hacks into my FB account, they can't access my ICICI Bank FB app. By following such an architecture, there's no need for banks to put their social media plans on hold due to the recent LinkedIn incident. However, I recognize it, when it comes to these decisions, perceptions matter more than the nitty gritty of the actual transactional flow, so anything is possible.

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