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Social media has become the biggest and most efficient media channel connecting the world. There are billions of people using social media on a daily basis.
Founders of these sites probably never envisioned that the small creations they had developed a few decades ago would influence the world in such a big way as it has today. Initially, social media was a way to connect people using the internet, another revolutionary invention that has taken the world by storm.
It was supposed to be a simple communication channel. However, today it has evolved to become entertainment, marketing, communication, and a banking channel.
With these changing roles, the industry has attracted a huge number of players competing for the billions generated by the industry. This has led to accelerated innovations in the sector.
Today, one of the most important industries in the world is trying to find its niche in the social media arena. This is the financial industry and more specifically the banking industry.
Currently, it is much easier for you to have a social media account than a bank account. This competition has given rise to social media banking which refers to the act of accessing banking services through social media channels.
As we dig deeper into this undertaking, there is one key component that will help us dissect this topic further. The mobile phone. This component has been highly referred to as the device of the future.
The bulk of these social sites are accessible through the phone application mode. This applies to mobile banking and internet banking services as well.
Can banking be implemented in social media?
The main question in this conversation is why should you use dozens of apps to access these assorted services? Can’t one app give the consumer experience of social media and banking?
The case question is can you use your Facebook account to access your bank services? Technologically, this is possible but are the players willing to pursue this route?
After my own personal analysis and reading this article, I deduced that perhaps one of the biggest challenges in this approach would be security.
There have been sustained breaches on social media platforms resulting in massive data losses. It would be catastrophic if these losses would be your lifetime savings safely stored in your bank account.
It would need massive investments and perception changes by both the service providers and us as consumers to instill confidence in the industry.
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There is a massive market in social media for the banks. They just need to find a penetration model that will ensure customer protection.
The next critical issue is the regulation. Different bodies regulate these industries. Policy and monitoring disparities across the two-sector are also a barrier toward the realization of this goal because decision-making is slow and bureaucratic.
One typical scenario is both social media account and bank account have a comparable starting process. This is the account opening.
We must agree that this process is very different as the banks are very rigorous and thorough as compared to the social accounts. This area needs serious discussions to ensure harmonization.
It will set a minimum needed threshold of having a genuine account. The government through the regulators should come up with favorable laws to ensure compliance as well as promote innovation.
We are still a distance from realizing enough levels of efficiency and cooperation across these industries. This is because the field is still green and the industries are very protective of their core businesses.
Industry players must recognize that there is enormous potential and benefits if this undertaking is well harnessed. The future will be based on this seamless technology and harmonization assisting drive inclusion and affordability of these services.
I’d like to know, what are your thoughts on social media banking? Do you think the world is ready for it? Are you ready for it? Let me know in the comments below.