Australian banks are already facing changes as as mobile use overtakes branches and fintech startups move into banking, but Bain & Company says the banks need to pay heed to social media platforms as well.
As Business Insider has already pointed out, some Asian social media platforms have built in so much functionality they are used for everything from paying bills to trading goods.
Social media platforms also have large user bases, consistently rank among the most used apps, and enjoy network effects – users are locked into the platforms friends and family use, give them an almost unmatched distribution network for financial services.
Bain specifically highlights China’s WePay, which claims 600 million users and turned its messenger app into a platform with more than 10 million third party apps, as a platform to watch. Many of the financial offerings in WePay fall in categories KPMG higlights as prime for disruption, such as loans and payments.
WeChat’s users “can pay merchants and utilities, send money to friends, deposit investments into money market accounts, book travel tickets, borrow money, and carry out other daily financial transactions with just a touch or two” reads Bain’s latest Customer Behaviour and Loyalty in Retail Banking report.
“More than half of users open the app at least 10 times a day, and purchase volume to date has been 11 billion yuan ($1.7 billion) through WeChat Wallet.”
WeChat’s western competitors – including Facebook Messenger, have not yet developed into platforms for service delivery. But they are slowly rolling out similar features as they experiment with new methods of monetisation. Facebook Messenger, for example, is making it possible to send money to your friends.