Elevating Social Banking

Offering of financial services through social media networks and platforms is changing the face of banking for the better, writes Goddy Egene

Branch-based banking is steadily becoming unfashionable across the globe, while fresh alternatives are rapidly evolving and expanding. Even the nature of transactions at branches have hugely changed. The shift is mainly in response to consumer sophistication, new regulatory frameworks and demographic shifts which have prompted the movement of banking transactions to alternative channels. In today’s world, the bank has moved into people’s pockets, handbags and other carry-on devices, all thanks to inimitable technological advancements.

It is all about following the herd. Such alternative channels as telebanking, self-service points, mobile banking, fax banking, automated teller machines (ATMs), call centres, point of sales terminal (POS), and Internet have emphatically joined mainstream banking as financial institutions respond to competition and an ever-changing landscape. In Nigeria, the race is on.

Chief Executive Officer (CEO) of Wells Fargo, one of America’s largest banks, speaking at the Fintech Ideas Festival in January last year, highlighted the imperative of technology in driving modern banking.
“Companies want consumers to be able to reach them from anywhere, whether on a computer or mobile device, and whether in a social media app or through a financial aggregating service,” he said.

This is the era of social banking, a derivative from changing consumer preferences. But what really is social banking? According to experts and operators, social banking means the offering of financial services through social media networks or platforms. Among such platforms are Twitter, Facebook, LinkedIn, WhatsApp, YouTube, Blackberry Messenger and Instagram. Its essence derives from the fact that a large chunk of the global population is spending considerable amount of time on social media platforms, creating a huge opportunity for banks to engage and offer products and services through these platforms.

The internet had about 4.16 billion users worldwide in December 2017 from a global population of 7.63 billion, according to Internet World Stats, an online portal on internet usage and population statistics. Africa, with a population of 1.29 billion, had about 453.32 million internet users during the period, with penetration at 35 percent. Nigeria had 98 million internet users as at December 2017, about 50.2 percent of the population, and reached 103 million in May 2018, according to the Nigerian Communications Commission (NCC). In May this year, the world’s largest social networking company, Facebook, announced that Nigeria had 26 million active users on the social networking site monthly. About 25 million of the Nigerian users access Facebook via their mobile devices. Active Facebook users in Nigeria in February 2016 stood at 16 million monthly, an increase of 6.3 percent from June 2015. Nigeria’s commercial capital, Lagos, has been rated the second largest hub for Facebook mobile use globally. The numbers are also impressive and growing on other social media platforms too.

These figures undoubtedly present interesting statistics for the banking industry. A key question for most Nigerian banks is: “How can the social media help us to achieve our business objectives?
For Chief Executive, Stanbic IBTC Bank Plc, Dr. Demola Sogunle, the growing number of people on social media makes online banking a natural trajectory to follow.
“The platform has grown beyond a mere hub where people congregate just to maintain contact with their friends and family; it is now an inevitable platform for everyday live, including almost the entire spectrum of banking services,” he said.

Apart from individuals, the social media has revolutionised the way people conduct business, the way government operates and the way society is organised. Stanbic IBTC Bank, according to Sogunle, is quite active on the leading social media platforms in Nigeria through which it is engaging a wide spectrum of its clientele. He said social media will remain the fulcrum of future banking and Stanbic IBTC will continue to leverage it and other evolving technologies to power its operations and offer its clients value for money and time.

The bank chief said banks must, as a matter of operational survival, embrace the new social tools enabled by digital technology to realise the full potential of social media enabled capabilities. While espousing the imperativeness of customer-centricity, Sogunle emphasised that connecting banks and social networks requires special focus on changing customer behaviour, which helps in determining the products and services to meet the needs of each focus group.

The evolution of mobile apps has enabled people to perform a variety of banking transactions on the go, 24/7. In the case of Stanbic IBTC Bank’s mobile app, #APPyness, the customer can undertake banking, asset management, pension and mobile money services right from their mobile devices. “Our customers can see their bank accounts, mobile wallet, pension and mutual fund investments in one place, rendered in a beautifully-crafted visual design that gives them total control of their money and investments,” Sogunle said.

The bank recently introduced its instant online account opening service, in line with its goal of helping to digitize banking in the country for convenience and seamless service delivery. The new service entails an instant and easy account opening process currently available to the general public for opening of two types of accounts, namely a bank account and an investment account. The new service came on the back of the inauguration of the bank’s pioneer self-service digital branch in Maryland, Lagos, in December 2016, fulfilling another pledge to consistently deploy robust technology and overarching innovations to drive home its quest for ‘convenience banking’ and a ‘bank for everyone.’ Similarly, its online banking channel, called New Business Online, which was launched a few years ago, is an internet-based multi-currency, multi-country, multi-entity online banking channel.

It enables clients conduct numerous banking transactions such as making payments to third parties, transfer funds between their own accounts and provides them with real-time access to their balances and statements for all accounts, across currencies, and even across countries. It is powered by a state-of-the-art technology and adheres to the highest levels of user-friendliness. It is secure and allows multiple signatory authorizations, and it allows clients to set up users and authorizers according to their own segregation of duties. It has a sophisticated built-in messaging and reporting tool and audit trails.

Across board, there is a consensus that the increasing emphasis on timely access to financial information, products and services makes imperative the harnessing of the power and reach of the Internet to provide convenient and targeted solutions. For the Standard Bank Group, to which Stanbic IBTC belongs, the objective is simple. “A combination of competition, customer feedback and our experience in other African markets, as part of the Standard Bank Group, has sharpened our insights into the needs and behaviours of customers and how best to address such needs. This has been instrumental in our unrelenting quest to develop unique value propositions to meet our customers’ expectations, applying a multiplicity of platforms, including the social media,” Sogunle stated.

Online banking, in short demand just two decades ago, has experienced exponential growth with banks investing heavily in it to deliver such unique products and services straddling the entire financial services spectrum. Complemented by mobile banking and electronic solutions, among other channels, online banking has not only expanded the frontiers of innovation and convenience banking, it has also made branchless banking a reality.

The benefits to customers are numerous and include convenience: Unlike a conventional bank branch, online banking sites never close; they’re available 24 hours a day, seven days a week, and they’re only a mouse click away. Ubiquity: Regardless of where the individual is, in or out of state or even out of the country when a money problem arises, all that is required is just to log on instantly to an online bank and take care of business, 24/7. Transaction speed: Online bank sites generally execute and confirm transactions at or quicker than ATM processing speeds, which is real time. Efficiency: You can access and manage all of your bank accounts, including IRAs, CDs, even securities, from one secure site. Effectiveness: Many online banking sites and mobile apps now offer sophisticated tools, including account aggregation, stock quotes, rate alerts and portfolio managing programmes to help you manage all of your assets more effectively.

As banks deepen consumer-centricity as an operational ethic, the breadth of possibilities which technology has unleashed has rendered a distinctive niche on the social media a hard nut to crack. However, bolds efforts are being made, producing varying outcomes. Stanbic IBTC Bank and other banks have emerged frontrunners in the application of technological banking innovations to drive financial services. Besides banking, social media platforms have also been tipped as pivot of socio-economic development with the quantum of business activities already in trillions. Ultimately, making success of social banking requires having a deeper understanding of the client’s business, and having in place an excellent relationship management team and supporting business growth via targeted and relevant products and services solutions.

A lot of credit must be given to Nigerian banks for their growing effort in developing online banking, an electronic culture, increasing investment in IT, deploying more ATMs and POS, as well as designing more robust and innovative financial solutions. Although today’s average banking customer is better enlightened, it is however clear that the scope to take financial services to many Nigerians is huge and technological solutions are helping to accelerate this process.