People Love Messaging, so Banks Need to Build Experiences Where They Live

May 14, 2018

MONTHLY ANALYSIS

This is the story of digital banking experiences that delight customers with secure, seamless engagement on any device, anywhere and anytime. Today’s mobile-savvy customers want everything to happen in four clicks, on a mobile phone, without sacrificing security. So how do you do that? Messaging!

There are two great mainstream examples of messaging applications providing a robust foundation for delivering financial services in ways that Gen M can appreciate:

  • WeChat has integrated payments, insurance, investments, and other financial services into its messaging app.

  • WhatsApp has recently launched payments in India.

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WhatsApp pPayments in India

Innovators are finding more ways to bring content, transactions, and commerce to messaging platforms. The travel sector (booking sites like Goibibo) has started leveraging WhatsApp and other messaging channels. Customers not only receive the booked tickets, but they can also check in and select seats from within the app. The experience is not just beautiful but also logical – it is where customers are already living.

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But why is everyone so bullish on messaging platforms?

It’s not just because the technology is available. The massive adoption by Gen M is driven by a need for efficiency and mobility trumps every other channel.

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It’s only a matter of time before banks will start using messaging as a core service delivery experience for their customers.

We’re engaged with many digital banking teams who realize the importance of messaging; however, they aren’t sure where to begin. Bankers need exposure and education about messaging technology’s ability to enable secure messaging-based banking.

And they have to partner with the right vendors and FinTechs who can help. Making this a reality is not only the need of the hour but also an exciting opportunity to transform the customers’ relationship with the bank overall.

But how far can the banks take this?

Can they really deliver bank statements and open fixed deposit accounts on WhatsApp, Facebook Messenger, or Snapchat?

Yes, they can and they should! The question is whether they will be able to overcome their regulatory and compliance restrictions and organizational inertia. The conventional thinking is that super convenient and easily accessible channels must come with a security tradeoff.

Of course, financial institutions should always be skeptical of security. However, this time, it might be misplaced.

Firstly, a Facebook or WhatsApp message and an iMessage can be fully encrypted end-to-end.

Secondly, these secure channels are already embedded in customers’ social media experiences (Facebook, WhatsApp), so integrating financial services into these social experiences makes activities such as checking your bank account balance, account history and initiating P2P payments enables an overall suite of intuitive experiences, without the user having to leave the place where she lives.

There’s no need for new passwords or hardware tokens. This is core banking over existing social channels that customers love for the ultimate digital experience!

There is technology already available to enable financial institutions to reach their customers over their preferred channels (email, chat, social, cloud) and preferred devices (mobile, tablet, laptop), ultimately catering to the banks’ primary KPIs of maximizing client engagement and revenue potential.

There are four key facets of the relevant FI-specific considerations, as explained by APrivacy (Canada/HK), a firm that can help banks achieve such objectives:

  • Multi-channel: Compatible with all messaging apps such as WhatsApp, WeChat, Line, and FB Messenger.

  • Geo-fencing: Control where users can and cannot access secure content.

  • Persistent control: Full control of who has the rights to access secure content at any time.

  • Audit trail & analytics: Track files, user actions, and analyze all information sent and received.

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PayKey (Israel) is creating a message-based banking experience

By using messaging solutions, a bank can enable everyday consumer messaging apps to communicate securely and compliantly with customers. Data security (encryption and recording) is provided on top of any instant messaging app.

For example, APrivacy secures the data itself, directly at the byte level, whether it is text, voice, or any type of file. Onboarding takes a few seconds and enables financial service providers to conduct business over consumer messaging channels.

The tech giants in China (Alibaba, Tencent) have invested heavily in creating holistic social+financial+commerce experiences in their super-apps, and the western world needs to catch up.

Of course, the ecosystem dynamics are different; the regulatory constraints are different; the ability and necessity of making new markets with minimal business development/cross-industry alignment is different; the tolerance for beta experiences is different.

Yet, for financial institutions in the US and western Europe, this is a golden opportunity to learn and act to pre-empt the potential for the US tech giants to dent and disrupt the financial services applecart.

Ultimately, this is all about meeting and exceeding consumer expectations. And banking integrated into messaging is just the kind of financial services experience that can make FinTech at SCALE possible, one chat at a time, and one seamless financial transaction at a time.

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