Now real-time banking on social media-LiveMint-15.10.2014
Banks are allowing real-time money transfers on social networking sites like Facebook and Twitter
If mobile was the buzzword of banks till now, social media appears to be the new way of giving customers more bang for the buck. Not just by mining customer sentiment, improving their personal branding with Facebook ‘likes’ or tweets, but also by allowing real-time banking and money transfers on social networking sites like Facebook and Twitter.
On 13 October, Kotak Mahindra Bank Ltd announced the launch of KayPay, a bank agnostic payment product for Facebook users to send money to each other, “without needing net banking, or knowing various bank account related details of the payee”.
“KayPay enables over 250 million Indian bank account holders transfer funds to each other instantly by just choosing recipients from their Facebook friends list,” the bank said in a statement.
Of course, users would need to register their existing bank accounts, held with banks that participate in the immediate payment system (IMPS) platform of the National Payments Corporation of India (NPCI), on Facebook or kaypay.com. Currently, KayPay is free.
In September 2013, India’s largest private sector bank ICICI Bank Ltd announced the launch of “Pockets by ICICI Bank”—an app that enables customers to carry out a slew of banking services on Facebook, underscoring “the importance that the bank attaches to the youth and social media”.
This is in addition to the other mobile banking apps that it has, including iMobile, Insta Banking, Video Banking (which enables the bank’s high net worth and non-resident Indians or NRI customers to conduct a video chat with customer care executives) and mPassbook—all available on the bank’s app store called ICICI Store.
Globally, France’s second largest bank by customers Groupe BPCE said in an 11 September statement that “all Twitter users in France—irrespective of their bank—will be able to simply “tweet” money to one another thanks to the S-money service developed by Groupe BPCE” from 1 October.
S-money is the electronic money subsidiary of Groupe BPCE that provides an electronic wallet solution on mobile phones.
India has over 900 million mobile phones and, recognizing the potential of mobile phones as a channel for offering financial services in the country, the Reserve Bank of India (RBI) issued the first set of guidelines on mobile banking in October 2008.
In line with the guidelines, banks have been offering mobile banking services to their customers through various channels such as SMS, unstructured supplementary service data (USSD) and mobile banking applications (apps). USSD is a protocol used by GSM cellular telephones to communicate with the telecom service provider’s systems.
However, real-time inter-bank mobile banking payments have been facilitated through the setting up of IMPS, now termed immediate payment service, and operated by NPCI with the approval of RBI. IMPS has enhanced the efficiency of mobile banking by enabling real-time transfer of funds between bank accounts and providing a centralized inter-bank settlement service for mobile banking transactions.
According to the latest data on mobile banking available from RBI, Indian banks garnered a total of Rs.3,985 crore from mobile banking transactions in June.
ICICI Bank led the pack with Rs.1,021 crore, followed by HDFC Bank Ltd’s Rs.796 crore and Axis Bank Ltd’s Rs.586 crore. The country’s largest lender State Bank of India garnered Rs.564 crore in June from mobile transactions, while Yes Bank Ltd got Rs.198 crore.
Real-time banking on social media will only open up another effective channel for banks.
The world’s largest social networking site Facebook.com has 1.32 billion global users, of whom 108 million are in India. Hence, social media implies a fundamental shift in the way banks interact with prospects, customers, employees and other stakeholders, and the top Indian banks are no strangers to social networking sites.
ICICI Bank had about 3.14 million “likes” on Facebook as on Tuesday, while HDFC Bank had 2.27 million. Yes Bank had 1.11 million, while SBI had 378,000 “likes”.
According to a social business intelligence firm, Simplify360’s Social Index score, HDFC Bank topped the list of the ‘most social banks’ in India on social media with a score of 80, followed by ICICI Bank with 77, and Yes Bank with 66.
Bangalore-based Simplyfy360 considers three broad parameters—buzz score, Facebook score and Twitter score—and takes a weighted average to calculate the final SSI score.
While ICICI Bank, HDFC Bank and Axis Bank scored well on Facebook, Yes Bank scored well on Twitter, according to the report.
RBI, on its part, has consistently highlighted the need for banks to increase their presence on social media.
At a 16 September event in Mumbai, RBI deputy governor H.R. Khan spoke about the need for banks to leverage social network updates as an additional know-your-customer (KYC) tool.
In August 2013, the Institute for Development and Research in Banking Technology (IDRBT), established by RBI, released a report The Social Media Framework for Indian Banks to underscore the use of social media by the banking industry and give recommendations—from a governance model, security implications and a social media checklist for banks.
“Gen Y can be tapped more easily at social media sites than brick-and-mortar branches,” the report acknowledged, and also said that banks need to design guidelines for engagement and the same needs to be communicated to the front-line staff representing the brand on social media.
Meanwhile, security will remain a very important consideration for mobile banking.
On 1 July, a master circular by RBI titled Mobile Banking Transactions in India—Operative Guidelines for Banks insisted that “...technology used for mobile banking must be secure and should ensure confidentiality, integrity, authenticity and non-repudiability”.
Banks use high-level encryption to ensure that online banking is as safe as offline but continued vigilance always pays when it comes to avoiding cybercrime
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