Social banking – for many it’s exciting. For others, it’s a huge privacy concern.
The big news last week was the Commonwealth Bank’s announcement that customers can pay each other and receive money electronically through Facebook.
As reported in the Sydney Morning Herald – “The bank has demonstrated a beta Facebook banking application that will allow customers to do all their banking transactions, including paying others and collecting money without leaving the social network.”
The growth of social media has drastically altered modern day communication and as the world becomes increasingly digitalised, brands such as CBA are looking at new ways to connect with their customers, especially those in Generation Y.
KPMG’s head of banking, Andrew Dickinson says social banking is definitely a generational thing. “For someone my age it’s a bit of a gimmick and not something that I’d personally use, but I can certainly see my kids and the Gen Y’s taking to it very rapidly.”
So why is there such a polarisation between the two generations?
For many from Gen X, banking through Facebook sounds like it would have a myriad of fraud and privacy issues. There is also a fear of Facebook using their personal information. Stories of hackers stealing bank details and other concerns such as email scams and viruses have not helped ease the concern around using money online.
For those already wary about revealing their personal lives online, social banking could be one step too far.
In reality, banking with social media could potentially be safer than traditional channels such as using your credit card. Dickinson highlighted how merchants did not get access to account details in the same way as they did with a typical credit card swipe transaction. Many customers already prefer to use payment services such as PayPal due to the concern with cards.
According to KPMG’s 2011 international Consumers and Convergence survey, “more than half of the respondents reported having used some form of mobile banking over the previous six months. That compared with around 40 per cent in the previous year and less than 20 per cent in 2008”. Couple the rise of mobile and social and it appears it is only a matter of time before social banking is part of everyday life.
Would you be prepared to bank through a social network such as Facebook? We’d love to know your thoughts.