Social Commerce Takes Flight In Emerging Markets
The proliferation of social media is quickly changing the way some customers in India, Southeast Asia and around the world interact with financial institutions (FIs). Using smartphones and other Internet-enabled mobile devices, customers are selecting when and where they engage and transact, whether through their bank’s website, text messaging or increasingly on social-networking sites. According to a recent report from comScore, “Social networking sites now reach 82 percent of the world’s online population.”1 The rapidly growing popularity of social networks such as Facebook and Twitter allows more customers to easily search for promotions, interact with customer service personnel or write public reviews about their experiences — both positive and negative. While traditional banking channels — such as the bank branch and automated teller machines (ATMs) — are still very relevant, customers can now integrate their in-person banking experiences with those online. Accordingly, it is fast becoming a business imperative for FIs to establish a presence and provide services in the fast-growing virtual space where FI customers and prospects spend a significant portion of their time. Experian recognizes the value of leveraging social networks: “Knowing that an average social network user in Singapore will, for example, spend an average of 38 minutes on Facebook means that a brand can increase the likelihood of capturing an individual’s attention by running digital marketing campaigns through Facebook.2 Compelling content and advertising will ultimately lead to greater engagement in social networks and, consequently, greater sales, whether on the brand’s own website or within Facebook.”
Usage of social-networking sites for both businesses and consumers continues to rise significantly in emerging markets throughout India and Southeast Asia, enabling people to interact and transact virtually in places lacking well developed physical infrastructures.3 This report explores how social media is affecting FIs in India and Southeast Asia, and is based on results of two surveys conducted by TSYS. One survey focused on insights on the attitudes and behaviors of bank executives throughout India and Southeast Asia, and another captured the sentiment of consumers in India, Indonesia, Singapore and Vietnam. The financial services sector can leverage social media in these markets to better engage customers. To be sure, already some FIs are reaping the benefits of improved customer service due to their social media efforts in India and Southeast Asia.
This report looks at the adoption levels of popular social networks in India and Southeast Asia, and how their fast growth could influence consumer banking preferences — whether for purchases, transactions, or information. Combining data from TSYS market research, it explores how payment technologies are likely to evolve and converge with social media, including through the offering of peer-to-peer payment technologies that can facilitate small-value and micropayment transactions. And finally, it highlights the four key challenges that lie ahead for FIs when it comes to navigating social media, along with three strategic considerations for evaluating social payment opportunities.
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