PRETORIA – Next time you are on your phone updating your status or tagging someone in a photo from last night’s party and you feel the urge to check your bank balance or purchase some airtime, you won’t have to leave the Facebook site to do so.
That is, if you are a registered FNB cellphone banking user.
South Africa’s second largest bank, measured by market capitalisation, announced on Thursday that it will join the ranks of only a select few financial services providers worldwide to offer some of its banking functionalities to cellphone banking users through the social networking site Facebook.
This comes just a week after news broke that Facebook, in partnership with the Australian Commonwealth Bank, is developing a full service online banking offering that will be available on the site.
Citibank also announced this week that it is probing its customers to find out if they would like to have some banking features available on the social networking site.
Very few banks are already active on Facebook. In 2007 MShift and KeyPoint Credit Union in the US announced the launch of their jointly developed Facebook Banking Application. In January this year, India’s ICICI bank also launched its Facebook app that lets customers carry out certain banking tasks, including applying for debit cards and requesting chequebooks.
An Accenture study last year highlighted the fact that social banking may perhaps be the next big thing in banking, stating that 90% of all financial services providers will be making special provision in their budgets to expand this new channel for banking by this year.
The study also quoted a Forrester report that showed that about 42% of online adults on social networking sites were interested in engaging with their financial providers while using the social media platform.
“As a bank, we average around 15 000 conversations monthly, via social media, with existing and potential customers. It is without a doubt that social media banking is the next frontier – to us this is a channel that will provide our customers with more choice and convenience to do their banking,” said Ravesh Ramlakan, CEO of FNB Cellphone Banking.
Currently there are more than 4.7m active Facebook users in South Africa. According to FNB, 150 000 of those are FNB Facebook fans.
Ramlakan, who worked for Vodacom and Telkom before joining FNB, told Moneyweb that there will be various phases to the roll-out for Facebook Banking. “In phase 2 you will be able to activate a FNB voucher from the Facebook site for a friend. So you can post a voucher for a friend’s birthday or send one to your girlfriend if you had a fight which can be redeemed for cash or used for airtime,” he explained.
The voucher service was launched earlier the year, but users have to go to the fnb.mobi site to buy the voucher. In phase 2 the purchasing function will be available on the Facebook site.
Ramlakan said that he will make a bold prediction to say that phase 3 will include payments.
He said in the first phase the products offered was chosen to suit the existing cellphone banking customers. According to statistics from the bank, 70% of transaction volumes on cellphone banking is to purchase prepaid products, 15% is balance enquiries and only 10% is for payments.
When it comes to value, payments make up about 90% and thus the long-term aim is to offer payment functionality on Facebook as well.
To access banking through Facebook, customers will need to link their Facebook profiles to their cellphone banking profile. Once linked they can access the ‘FNB Banking on Facebook’ application via Facebook which will allow them to check their balances, purchase prepaid products including airtime, SMS and BlackBerry bundles, as well as the option to view Lotto and PowerBall results.
Ramlakan didn’t want to comment on when phase 2 or phase 3 will be rolled out, but did say that they would like to assess the service over the next three months, compile feedback and perhaps sort out any glitches that might occur.
Facebook as a platform is not the most secure on offer, with more and more people having their profiles hacked and struggling with privacy.
Ramlakan told Moneyweb that the first products on offer will be low-risk products and because of security issues, not all cellphone banking customers will have access to Facebook banking from the get go.
He said that as with the vouchers launched earlier this year only some customers will have access to the service – those where FNB has enough behavioural background to ensure that the customer has the right profile for the service. With the second phase more security will be added.
“You will have a similar security level as with the current cellphone banking,” he said. His estimate is that most of the WAP enabled cellphone banking customers, about 55% of the total base, will qualify. FNB will communicate with those who don’t qualify initially to let them know when they will qualify, he said.
Ramlakan is not complacent about the fact that FNB is one of only a few banks worldwide who is treading onto the social networking platform.
“I would have liked to be first,” he told Moneyweb.
He said that FNB spends a lot of money on innovation and that in the social media environment the bank has a team that focuses a 100% on this specific channel.
“FNB customers expect you to be technology savvy,” he said.
In December of 2011 FNB had 4m registered cellphone banking users, with 25bn transactions being completed through the service. This was to the total value of R2.7bn.
In the last 12 months 1m cellphone banking users have been added to the base, Ramlakan said.
For the lower end of the market, those earning under R100 000 per year, it is their main channel of banking where those earning between R100 000 and R500 000 switch easily between cellphone banking and online banking, depending on which is most convenient at the time. About 65% of FNB’s cellphone banking base is customers earning less than R100 000 a year and the majority (35%) reside in Gauteng.
Ramlakan points out that 75% of the users are between the ages of 19 and 40, but that a surprising percentage (20%) is between 41 and 60.
“We even have clients aged 80 and older who do cellphone banking,” he said.
Ramlakan indicated that they will test Facebook banking in South Africa first before expanding to the other SADC countries like Namibia and Botswana.
He also indicated that FNB is launching cellphone banking in India next month. He conceded that the Indian market is extremely competitive, but that if FNB manages to get 1% of the market share, it will be bigger than the whole of its current SADC market.