Social Banking May Have Life Left in it After All

November 8, 2017         By: Steven Anderson

While there’s been more than a little doubt about the whole social banking concept lately, a look at the overall mobile payments environment actually manages to cast doubt on those doubts. With chat tools adding mobile payments systems and mobile payments tools adding chat systems, it’s easy to see where the connection is between social and payments. Such developments are stretching into banking, too.

PayKey recently detailed some of what’s going on on this front in an interview with PYMNTS, where PayKey noted that its smartphone keyboard-driven system allows for ready access to financial services, without needing to actually log in to a bank account. Using a combination of mobile apps and the PayKey keyboard application programming interface (API), users can effectively connect a bank account to most anything.

This, PayKey asserts, is one of the biggest sources of friction between banking systems and their users; the need to input credentials repeatedly over several different sites. Since peer-to-peer (P2P) payment systems like Venmo often don’t need that kind of repetition in credentialing, a lot of the hassle is gone with it and the experience is overall better for the end user.

I’m not sure that’s the case, myself; while convenience is all fine and well, when it comes to money—particularly the money in my bank, which represents the produce of months and years of labor—security is first and foremost on a lot of minds, mine included. When it comes to banking, a lot of users out there want that money protected rather than easily accessed and shared.

That’s not to say that social doesn’t have a place in banking. After all, we’re increasingly seeing mobile-only banks, and even some banks that are shutting down branches because the idea of keeping the lights on at the downtown location—not to mention the sewer and the property taxes—are just too great a cost to bear.

Social may have a role in banking, and social banking may not be dead on arrival. Yet it’s not out of line to think that bank customers may not be too eager to just see mobile, social banking come into play. Social has a role, but it’s a role better called “supporting” than “main”.