Author: David Webber
Could social payments be the future of digital banking?
In the UK there are over 10 million Twitter users and 31 million active Facebook users. And yet in March, Commonwealth Bank Australia scored a world first when it launched a Facebook banking app, Kaching.
In Australia alone, the new banking app meant 12 million Facebook users were given an easier way to make payments and manage their finances. Kaching subscribers can use the bank’s app to pay for events, give gifts on friends’ birthdays, and send reminders to those who owe them money.
Similarly, American Express also launched a social payment service earlier this year whereby customers from the US could purchase-by-tweet. Credit card holders posted specific hashtags on Twitter to trigger payments for products from specific retailers. Although limited in scope, this Amex campaign highlights further the potential for social payments.
In the UK, our research revealed one in eight Brits would use a social networking site to make direct payments to friends or family, meaning it could be the next logical progression for digital banking. Social media platforms offer banks an opportunity to make customers’ lives easier by simplifying processes already in place. For example, a customer could pay their friend with one simple click via the recipient’s Facebook page, rather than spending ten minutes logging into a web browser, entering new payee details and passing card reader security checks.
With digital banking popularity already at an all-time high and 75% of Britons preferring to use web browsers or mobile banking over visiting a local branch, it’s the perfect time to optimise banking services for social media. However, while the potential is evident, we cannot ignore security concerns in developing social banking systems.
The shortcomings of existing social media security, seen in the high profile hacking of the Burger King and Fox News Twitter feeds for example, could provide banking technology developers with a colossal challenge. However, with the benefits to the consumer and bank itself so high, is this a challenge the financial services industry in the UK should meet head on?