When social media looked to monetise its platforms, of course it looked to that old media model — advertising. Then people started talking about s-commerce. S-commerce meant everything from Social Proof, Social Influence, Likes, Follows, RTs to unboxings on YouTube. In 2014 Facebook and Twitter started experimenting with Buy buttons and Product Cards. But still, the S in s-commerce could have stood for soft.
Now things are hardening up. Barclays has started accepting payments on Twitter through its recently acquired Pingit payment platform. Barclays, along with USB and Santander, are even looking into Bitcoin, the controversial cryptocurrency that was used by criminals on the deep net trading site The Silk Road. About as far outside of traditional banking as you can get.
But as Santander chairman Anna Botin recently told the Financial Times, the biggest threats to the traditional banking system come from Apple, Amazon, Facebook and Google, “It is these four large tech companies that are worth more than us. They have more cash. They have less regulation.”
We’d argue that for Millennials, companies like Twitter, Facebook and Apple have a far more important commodity than money – they have the trust. Millennials lived through the banking crisis and subsequent scandals that followed. They posted and tweeted about it.
Millennials interact with social media and brands like Apple far more than they do with their bank. A survey in America showed that 91% of affluent Millennials would rather use social media to gather information on financial markets, than contact a financial adviser. And, they’d be more likely to buy financial services from non-traditional brands they trust like Apple, Google or even Nike.
So are we about to see The Bank of Facebook? The Twitter Building Society? The Apple Credit Card? Jonathan Hirshler, AML’s digital director, suggests, “There’s now very little to stop them offering a viable alternative to traditional banks as the go-to place for payments and other banking services.”
In a study on Millennials’ attitudes to financial services companies that we promoted for one of the global asset managers we work with, less than 1% of young people wanted to be contacted by organisations on social media – terms like dad dancing and creepy were among the responses.
When banks like Barclays start offering a genuine service on social media, it breaks down barriers and gives them an authentic reason to engage with Millennials, and to start to build trust (rather than rebuild it, as trust has never been there). Of course, the partnering of financial companies and social media platforms could give the latter a new authority in financial services, and the chance to learn how to provide them. Or perhaps there will be a third way – with established banks whitelabelling products and services for social media to sell as their own. It will be interesting to see who comes out on top.