On 13 October, Kotak announced the launch of KayPay, billed as the world’s first platform that allows customers to seamlessly transfer money from their bank account to a list of registered banks using the Facebook ID. This is the second such product offering by the bank which utilises social media to engage users; the previous being the Kotak Jifi account, which allowed accounts to be opened and operated (in part, without cash transfers) via Twitter. There seems to be a growing trend we are seeing in the global personal banking sector.
Sandip Maiti, CEO and founder, Experience Commerce, says, “Many banks are experimenting with ‘social’ but they are all in a limited way such as, broadcast account information (on a 1-on-1 basis) or use secure access login of Facebook”.
Examples of such experiments are: French bank Groupe BPCE has a launched Twitter cash transfer service, while Turkey’s DenizBank became the first in the world to offer customers access to their accounts via Facebook.
‘Change in the way people bank’
According to a 2014 retail banking report by Capgemini, positive customer experience is down to 39 per cent in 2014 (12 per cent dip in India). referring to this, Maiti says, “Banks today are struggling with basic experience delivery. They can barely manage their contact centre experience or reputation on social. Many banks I know are struggling to increase adoption rate
of their most native mobile banking application”. He thinks that social media may provide banks with the opportunity to better engage their customers.
On the other hand, Karthi Marshan, head of marketing, Kotak Mahindra Group, says social media banking could help banks turn things around and allow banks to engage customers better.
He explains, “90 per cent of all Jifi customers use internet banking or mobile banking, whereas less than 40 per cent of all bank account holders use digital banking services. Further, the digital customer of Jifi is a far more engaged customer, visiting our banking interfaces roughly 2.5 times more often than a non-digital customer.”
But in an age, where the debate on online privacy rages and the number of cases of social media
hacks is on the rise, will social media banking find mainstream acceptance? Will concerns be more of an issue in India, where just recently, Visa launched a campaign encouraging first time
online buyers by assuring them of safe transactions?
On the security aspect, Marshan underlines that banks would never forego customer security for customer convenience. On how banks could offer secure banking via social media, he says, “Typically, a second factor for authentication, as well as instant alerts about transactions to customers completes the loop on a transaction enabled via social media that is totally safe.”
Maiti however, cautions, “Security is an ‘always on’ war against infiltrators and I see no reason why banks will enable so cial media access for transactions.” He adds, “Information access is on the other hand very useful and there is not much of security concern there. For example, my salary gets credited and I need to know when - for that we already have a very powerful SMS/mail interface. If I choose to receive this information additionally as a tweet or on Facebook, it is a nice to have that frill and that is something where security need not be a big concern. As long as the transactional and informational pieces are kept separate, there is no big issue.”
‘Morphing banking services’
Marshan says that the definition of banking services will morph significantly over time, as the worlds of social and banking merge.
He says, “We will see a lot of sharing, comparing, group learning behaviours coming to the fore. And a well-informed and aware audience always tends to be a heavier consumer of services, so the ambit of banking services itself will inevitably grow.”
Warning of the unknown, he says, “I suspect it will grow in ways that career bankers will find challenging to imagine and anticipate. It will take new, behavioural economics mindsets to predict the lie of the emerging landscape.”
Offering a different perspective and questioning the functionality of social media for transactions, Maiti surmises, “I am not convinced that the personal transaction data is natural to platforms where
the core reason to exist is ‘share’. If it’s about sharing movie experiences or shopping behaviour,
existing social platforms do that already well, so what is social banking going to offer me that is different?”
Appeared in the 31 October Issue of Campaign India