Social Media Banking: An enthusiast vs. devil’s advocate

One of my friends called me after reading the P2P Lending in India.  He is an avid reader and a technologist unlike a mixed breed like me.  He said "Siva, this P2P thingy will never fly in India.  We Indians will not believe something which is not from Bank easily".  I was jubilant that we are getting into a healthy debate.  I responded that “I do agree with you that it’s not straight forward.  Even a decade old P2P industry like the US is just having 1% of the total population using P2P lending.  Traction to the concept may need time, but the millennials will change the game”.  He didn’t agree that millennials will be game changers and wanted to play a devil’s advocate role on the argument.  Below is a short transcript of the enthusiast (which is me) and the devil’s advocate. I will leave the decision to you on whose side to choose to at the end of the article.

Devils advocate(DA):  The size of the Bankable millennials market in not significant.  How do you think they will be a game changer?

Payment Enthusiast(PE): No.  65% of the Indian population is under 35 which is close to a billion. Even 50%  of them is above 18 you have 500 million people who are millennials getting into the Banking.  Mr.Anthony Jabbour, COO, FIS has recently mentioned that the Bank needs to adapt for the millennials and not vice versa. 

DA:  You are talking about the volume, and I am talking about the value.

PE:  I am exactly coming to the same point.  Gone are the days where Indian Banks can only work for high value.  Already Banks are working on creating road-map for getting the volume business

DA:  You would know that my next question will be on proof for such theory.

PE: Yup.  I do have data on this.  Will you agree that Social media is used more by the younger generation than the old?  For example, 43% of Facebook users are millennials above 18 years. Our Indian Banks are already working on leveraging this crowd with social media banking.  Asia Pacific has the highest penetration of Social Media as per recent CapGemini report.  Let me try explaining with few India examples.

You would know ICICI bank will be a pioneer in launching any new trend in Banking.  They have brought in Banking to Facebook using POCKETS. It’s a Facebook app which does you to do everything from ticket booking to recharge.  All the Internet Banking features are transformed to Facebook and the beneficiaries are not identified by accounts or IFSC code but just by the Facebook ID.

Twitter is covered by their product icicibankpay.  The product includes features of balance enquiry, bill payment, funds transfer and event it has opening deposit accounts too.

DA:  You have already mentioned ICICI is a pioneer.  How about the old generation private sector Banks and public sector Banks?

PE: Well, they are joining too.  Either directly or indirectly.  Let me first tell you the indirect one.   Chillr is a money app in India which is providing most of the features of Bank’s traditional Internet Banking.  Funds transfer, recharge support, request for funds, etc.,  The beneficiary identification in this case is only based on the mobile number in the Chillr App.

Chillr is already tied up with Banks of all flavours.  It includes old generation private Banks (Catholic Syrian Bank, Federal Bank), new generation private sector Banks (HDFC Bank), public sector banks ( Andhra Bank, BOB)

On direct products, Axis Bank launched Ping Pay  in 2015.  It’s a multi social payment app where you can link to all social media and can do recharge, funds transfer, and funds request to your friends.   

Check their ad is quite youthful.  Though you would blame me that I mention so because of Deepika ;)

Kotak Mahindra Bank launched the product Kotak Jifi, which included #Hashtag banking for Twitter accounts and giving loyalty rewards for the Customers on every Facebook sharing.  This is not new it started in late 2014. They have gained digital innovation and best implementation award during that year.

Last but not least.  Biggest public sector Bank in India SBI recently launched mingle a Facebook app like Pockets.  Though, it’s a ‘me too’feature like others coming from a public sector bank matters.

DA:  Hold on.  Hold on.  I think you are going into the infamous mental model of Availability bias which is weighing the judgement on the recent news and information.  Just tell me one thing what’s your justification on all these social media products are developed for acquiring new business and for millennials.  Why can’t I argue that these are all  ‘Me Too’ efforts from the developed Countries?

TA:   The new social media products are for both retaining existing customers as well as acquiring new customers.  The recent financial brand survey of top 100 Banks using Social media shows that six out of top 20 Banks are from India and first among them is SBI. 

We have discussed all the Banks except Yes Bank, which is also launching a social media banking shortly. 

On your  ‘Me too’ feature from  developed countries, doesn’t look so.  Even Singapore is only now discussing  Facebook based banking   The underlying technology will reside on the Singapore’s existing internal fund transfer system, Fast and Secure Transfers (FAST).  As a matter of fact, most of our social media banking tools are built on the similar IMPS infrastructure which Singapore is trying to replicate. 

DE: Ok, looks like you are up the sleeve with your data on the argument.  Let me try my last trump card.  What’s the return on investments for the Banks for this new infrastructure?  What are the charges for the products?

PE:  You nailed it.  I don't have an answer for this question.  Most of these services are provided for free now.  The IMPS charges are also absorbed by the Banks.  I would see this is the period where the Banks are investing to gain ground for the use.  Once it’s  becoming a go-to service to the users, they would start charging them.   

DE:   Ok.  It looks like you are trying to become the brand ambassador for techno-products at Indian Bank.  My takeaway is a lot of information on the new products in Indian market.

PE:  Not at all.  I am just fascinated in observing technical progression in the Indian Banking industry.   I too benefitted in this discussion.

DE:  Is it?  What is it?

PE: I will keep it as a suspense for you.

As readers, you would have got it by this time that I have leveraged the discussion for this article.  Hope he is reading this little late.  

I am interested in knowing your thoughts in comments section.  What’s your experiences with social media banking??

References: Let's talk payments;Wikipedia - Indian Population; Statista - Facebook statistics;ICICI POCKETS; Chillr; Axis Bank Ping Pay; Kotak Jifi; SBI Mingle ; Financial Brand - top 100 Banks in Social Media; Banking Frontiers; Telegraph;

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