Surprisingly little has been said about Facebook’s foray into social banking. In July this year, Citigroup asked its Facebook fans whether they would ever bank on a social networking site and the question raised more than 300 comments, most of which weren’t positive. Despite the sentiment, Australia’s Commonwealth Bank has already gone ahead and provided its social media savvy users with an app that allows them to view their balances and, critically, make payments.
For many (including this writer), the thought of having one’s banking at the mercy of a social network sends shivers down their proverbial spines. Facebook, particularly, doesn’t have a spotless record when it comes to viruses and being hacked — never mind the infrequent brainless moments when friends are duped by spam operations. And yet, with over 1 billion users and an unstable share price, it’s not surprising that Facebook wants to tap into the most lucrative industry on the planet.
South Africa’s First National Bank was recently named the “World’s Most Innovative Bank” in The Financial Global Banking Innovation Awards held in Washington DC. This tremendous accolade is no mean feat for techno-savvy CEO Michael Jordaan who is one of the more active corporate leaders on Twitter today.
The bank also recently launched “social banking” as a new product on Facebook, so we sat down with Jordaan to get the inside track:
Memeburn: Why is FNB doing this?
Michael Jordaan: The first departure point is around the South African usage statistics for the various social media platforms. Facebook already has an impressive 6-million users in South Africa, while Twitter has around 1.5-million, LinkedIn around 1.8-million and Mxit about 10-million.
As users are already using these platforms, often multiple times per day, FNB identified the opportunity to extend its already impressive digital footprint into this space. From this departure point, FNB had to establish what role this particular channel would play in our overall business and channel mix. Social media allows for high levels of engagement across various areas including marketing (awareness, information and discovery), sales (acquiring), support (education, feedback, advice and complaints) and transacting (social commerce and loyalty).
Social banking or commerce is a natural extension of our digital innovation drive, which aims to provide customers with a choice of channels to engage with FNB for their banking and transactional needs. We therefore view social media as a complimentary digital channel, but with its own unique characteristics around social context. We believe social commerce in general will expand rapidly in the next few years.
MB: What value does it bring to the banking experience?
MJ: FNB views social media as a complimentary channel to our existing channels ranging from branches, call centres, online and mobile. FNB has provided its customers with another, or alternative, “always on” channel that is able to meet most needs across the various areas of marketing, sales, support and commerce. It has been a notably successful channel for new customer acquisition.
Many potential customers are choosing social media as a way to research their choice of bank with their peers, which have led to several direct and indirect sales of our products either via our online or mobile conversation channels or directly via our social media profiles. In addition to this, statistics released by the Aberdeen Group in February 2012, state that potential customers are 51% more likely to buy if they have a social connection with a brand. It has also become an important source of information to help drive communication and marketing strategy and most notably provides input into process improvement and future product development.
FNB is considered a leader in social media space by its peers in the financial services industry, as well as in various other unrelated sectors. This leadership position supports FNB’s overall positioning in the innovation space.
MB: Isn’t banking a private affair? Do people want to share their banking?
MJ: All of our channels have a specific role to play in our customers’ lives. We strive to provide a relevant experience in all of our channels, to meet particular customer needs at a particular time and place. Customers have personal preferences that are driven by their circumstance and life stage — some customers for example prefer digital interaction while others prefer face to face interaction. FNB believes that the emerging trends around social commerce will make banking relevant in the social context.
MB: What do you see the greater ecosystem looking like? For example, how would social banking tie into your app and geolocation payments?
MJ: As per the above, we see some integration of social contacts into payment facilities such as the banking app as an obvious next step. The Facebook application paradigm has also opened up a myriad of possibilities to provide services similar to what FNB is already providing on the banking app, we see most of the larger social networks opening up more customised and secure functional capability going forward.
Check-in functions offered via Facebook and platforms such as Foursquare do hold some opportunity for location-based services similar to geo payments, but there are several security concerns to address, as for all location-based services.
Unfortunately, we didn’t get around to talking about the security and privacy implications associated with hosting a banking platform on Facebook and hopefully any bugs in the system aren’t exposed via nefarious means. As always, this is an interesting technological development… but is it one step too far?