Johannesburg - South African financial services companies are yet to fully appreciate how transformational mobile technology is going to help the future profitability of their businesses.
Facebook’s global head of financial services strategy, Neil Hiltz, said on Thursday that it was important for companies to understand that consumers preferred personalised marketing solutions to endear brands.
Hiltz, who is visiting the country to engage with industry role players, said companies could take full advantage of South Africa’s 8.2 million daily active Facebook users, 8 million of which accessed the chatroom through their cellphones.
“With Facebook’s’ advertising capabilities, we work with marketing companies to leverage the data we have, and the data the banks and insurance companies have to create more highly personalised conversation with customers,” Hiltz said.
Last month the company said global money transfer service TransferWise was the latest firm to subscribe to Facebook Messenger. It allows its clients to set up foreign exchange transactions over the service.
TransferWise rival, Azimo, joined the platform last year alongside Visa, Mastercard, American Express, as well as China-based Alipay.com to facilitate mobile payments.
The country’s financial services sector has not been immune to a shift from branch-focused service delivery to online platforms by consumers.
FNB last week said it had experienced faster than expected growth in its E-Migration strategy. The bank said for the year to December 2011 to the year to December 2016, deposits from its branches decreased from 65 percent to 31 percent.
However, it said year-on-year change in transaction volumes for mobiles increased by 26 percent, internet by 11 percent and banking applications by 80 percent.
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Hiltz said the use of social media helped to reduce costs and improve efficiencies.
“What we know is that smartphones are a platform that nearly everyone on the globe is going to have access to. Banks and insurance companies need to accelerate their investment in the space to better understand their customers and their investment decisions.”
Mobile and online digital market research firm, Juniper Research, found that the value of domestic money transfers, including operator money and social media money services, would reach $520 billion (R6.6 trillion) in global mobile transactions by next year.
The report said in 2015, Africa and the Middle East had 235 million registered mobile money users, representing the largest share of the global market.
A survey conducted by the Gates Foundation, World Bank and Gallup World Poll also found that of the world’s top 20 countries for mobile money usage, 15 of them were in Africa with Kenya accounting for the majority of the world’s mobile money transactions.
Hiltz said Facebook was going to continue to grow and invest in the continent as opportunities were plenty.
“We believe there is room to grow our market share in South Africa,” he said. “We feel we are currently under-penetrated in the financial services industry in the country and continent.”