Social media: The mobile money ecosystem

26 October 2011

Haridas Nair,
vice president,
mCommerce Solutions and Services at Sybase 365

I recently learned about a sweet little mobile banking application called WishList. You download it to your phone, and type in all the stuff you’d like to buy: furniture, vacations, a house, new car, etc. As you save toward those things, you can allot amounts of money to each. WishList connects to Facebook so that your friends can see your progress.

This is such a great development, because it shows how to combine Facebook with personal financial management, and make it fun. The bank behind WishList is not charging for the app, or selling anything directly, but it is making a name for itself among the younger generation, and building a friendly, fun social media brand.

Banks around the world should sit up and take notice. Many are already working on how to incorporate social media into their mobile banking strategy, because that’s where all their customers are hanging out. A handful of banks around the world are using Twitter to provide customer service, make announcements and circulate news. Even more are making fan pages on Facebook to do the same, trying to get customers to “Like” them.

That’s all well and good, but it is not going to change the game or enroll customers in large numbers. But something like the WishList app - incorporating the concept of personal financial management and making it fun - just might.

Why is it important for banks to be on social media? Because it is so easy to communicate with a group of people through your social network, free of charge. In the future, banks may be able to reach more people through social media than through a traditional advertising campaign. Also the playing field is level: the biggest bank in the world gets the same footprint as the smallest. It could also become a nice test bed to launch new products and services and get feedback. The possibilities are endless.

Several weeks back, Apple announced the integration of Twitter into iOS5. That will make it easier for developers to incorporate a Twitter feed into applications. For a bank, that could mean that its Twitter feed shows up in its clever social personal finance application.
As I discussed in my Mobile Commerce: Competition before Collaboration blog post (1), the mobile money players were supposed to collaborate to create an ecosystem before mobile commerce could take off. However, in the North American market, we have seen just the opposite, with mobile payment methods from merchants gaining popularity with consumers, and that causing competition among merchants, banks and telcos. Eventually, I think we will see partnerships and cooperation that will create the ecosystem, but right now, everyone is doing their own thing and competing to enroll customers. That is causing tension.

Social media just may be the thing that can help establish this ecosystem. Banks, merchants and telcos are all incorporating it into their strategy. Apple is incorporating it into its iOS. Consumer behaviour has already changed with the rise of smartphones and other mobile devices, both in terms of making payments (see my Mobile Payments have already taken off in the US blog post (2) for more on that), and also sharing information. For example, I went to a U2 concert recently and got stuck in traffic for 45 minutes, but because so many friends were there on Facebook, my wife and I could see pictures of the opening band and hear about what songs they were playing. Once inside, it seemed like everyone around me was on Facebook, posting pictures and updates.

The net result is this: Instead of trying to change consumer behaviour, businesses now have to accommodate changed consumer behaviour and do what their customers are doing. That is why social media is going to be important: because that is what our customers are telling us.

1. Mobile Commerce: Competition before Collaboration
2. Mobile Payments have already taken off in the US

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