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Are Bank Facebook Apps the Future of Digital Banking?

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23 July 2012
Jacob Jegher
Should banks have a Facebook presence? What should they actually offer to customers via Facebook? Should it be informational or dare I say it, transactional? A couple of interesting announcements and feelers have surfaced lately:






A handful of banks have already gone wild on Facebook , a notable example is ICICI.

icici

Is Facebook going to be a viable access point for consumer transactional needs? In my opinion, banks that are enabling or attempting to enable transactions via a Facebook app are barking up the wrong tree. I've seen nothing to suggest that customers want this or would even use this. In fact, I've seen evidence of the contrary. Security concerns are without a doubt the number one issue. Furthermore, most US and Canadian banks have to jump through multiple compliance and legal hoops simply to post basic info on Facebook. My quick take - banks have so much room to improve across digital channels. Time and money are better spent improving online, mobile, and tablet experiences. Even if banks do go the route of offering Facebook transactional banking apps, they are likely to suffer the same fate as iGoogle. The web is boundless, and I don't see Facebook as the primary "portal" for transactional banking. Facebook is still primarily about interacting with friends and family. Brands clearly have some sort of home on Facebook, but hey, we all know what the value of a "like" is really worth on Facebook (or do you?). Please chime in. Are Facebook banking apps the future of digital banking?

Comments

  • I'm not sure that Facebook apps are the future for banking - not least because there's no guarantee that Facebook will prove a stable long-term platform for any brand in the future.

    However, the idea that underpin Facebook's success - the ability for people to connect via a technology platform - offers a way to re-imagine banking altogether.

  • i agree with your quick take, jacob. there remains tremendous opportunity for banks to streamline, integrate, and otherwise elevate the overall client experience across the self-service (digital) channels. and there are dozens of unimagined, or at least unfunded, products and solutions that can help to put better information, more relevant features, and greater control in the hands of those bank clients who opt to research, shop and transact remotely. banks would be wise to up the investment and focus the best business thinking in this critical area.

    but i do agree with ian that social media, in general, allows us to imagine and invent new means of connecting people to monetary resources ... for the purpose of paying, investing, donating, sharing, sponsoring, etc. ... and transaction capability seems like an essential ingredient in that new realm.

    i'm a bit skeptical as to whether facebook can provide the right trusted platform over the long haul, but the banks must actively pursue a creative, informed, customer-centric social strategy, or i'm fairly certain that other relevent brands / platforms will emerge with innovations capable of grabbing profitable market share.

  • Thanks for your comments Ian and Lindsay.

    I agree - social media allows us to be creative and find new ways of connecting people with each other and with brands.

    In my opinion, today the bank has to be the front door and trusted source. With that said, I believe there are ways of connecting to others, while still having the bank provide the platform. This could change over time, but again, banks have enough to work on today when it comes to digital channels. A couple of examples of how social plays into banking:

    - Social Money's white label solution for banks. Bank user creates a savings goal, other Facebook users can contribute to the goal

    - Serve's solution that allows Facebook users to send/receive money. There's no reason banks can't offer P2P that allows a send/receive to a Facebook user for example. Popmoney offers this type of feature.

  • I think, it ist necessary to have a different look at facebook and banking. For Facebook it is today more interesting, to develop the functions in payment transaction banking, more than to be a full service banking provider. This is because the point, that in Germany (and i think it is also in other countries) is one third from the comission-revenues out of payment transactions. This is much more as the comission revenues in financial instruments. At second, the number of people who use pament transactions is bigger as the number of people, who use other banking functions.
    Maybe, the other business segments in banking would come in remote future at Facebook. At the moment, companies which are specialised in segments of social collaboration for stocks, bonds, mutual funds, social lending and so on, will be first in this markets - and they will use Facebook as a marketing instrument.