arrow icon

The Role of Social Media in FinTech

Post by:
March 8, 2021
Post by:
No items found.
March 8, 2021
The Role of Social Media in FinTech

Mobile commerce is estimated to reach $278.9 billion by 2018. With this increase, there comes a shift in the way we make payments across the globe. There'll be an estimated 2.55 billion users of social networks by 2017, according to a report by eMarketer. It would be an understatement to say that social media will play a significant role in the future of payments. The data collected through these social media platforms can analyze consumer behavior and preferences, which is the most critical factor for analysis for FinTech companies.

Social media offers a host of benefits to the lending sector, and it brings tangible opportunities to lenders. As credit underwritings evolve and while credit standards advance with the economic cycles, the credit underwriting process remains the same. While factors such as salary, job history, and credit score servings would remain the core of credit decisions, the array of data with the potential to provide accurate risk scoring and better evaluation is available using social media. The innovative lenders are incorporating social media data into the credit underwriting process. Lenders taking advantage of the data generated by social media can differentiate themselves with enhanced credit lending processes and customized service offerings. Online retail P2P lenders such as Lending Club, Prosper, and small businesses have used online and social media as their core marketing channels. Social media marketing has become an essential component of brand marketing for companies.

Financial institutions have also starting to recognize the opportunities provided by social media in catering to today’s generation. With the ever-evolving payments landscape, it has become imperative for banks to offer services that cater to the changing channels of interaction, especially social media, even in the realm of payments. As a result, banks such as Kotak (India), Barclays (UK), Rakuten Bank (Japan) have opened their doors to new online payments via Facebook and Twitter.

Platforms such as Dwolla, Fastacash, Azimo, and Wrapp have also enabled gifting, giving, or transferring money to friends and relatives via social media. Networking platforms such as Twitter and Facebook have also entered the space. For example, Facebook’s peer-to-peer payment feature enables friends to exchange money via the Messenger app. In contrast, Twitter has rolled out product and place pages that allow users to discover and purchase items within the service.

On the other hand, some products in FinTech are built on social media. For example, Venmo, a mobile payment app, has added its social media component by integrating with giant platforms. Venmo’s business model, which integrates payments with social media, sets it apart from competitors in the e-payment space. The service is used to share payment data on a social platform similar to how people share photos and news on Twitter. For example, if a consumer wants to pay back a friend for dinner or such, he is required to open the Venmo app, select the appropriate contact from his list of friends, add the dollar amount and send. Before the transaction is completed, Venmo prompts the user to ask what the payment is for – users could write Dinner at Domino’s or Coffee at Starbucks. These annotations are public by default. They are visible to those involved in the transaction as well as the user’s friends on Venmo.

Create secure frictionless customer experiences using modern identity solutions

Join over 1,000 businesses that rely on Prove across multiple industries, including banking, FinTech, healthcare, insurance, and e-commerce. Contact us today.

Prove: the world’s most accurate identity verification and authentication platform

Trusted by 1,000+ leading companies to reduce fraud and improve consumer experiences. Contact us today to learn how you can frictionlessly secure your digital consumer journey — from onboarding to ongoing transactions.

Keep Reading...Read our latest white-paper on this subject!

Tap the button below to read our latest white-paper on the subject as industry leaders.

Accelerate your onboarding

Contact us to learn how leading companies are using Prove Pre-Fill to modernize the account creation process by shaving off clicks and keystrokes that kill conversion.

Create frictionless customer experiences

Get in touch to find out how we can help you identify your customers at every stage of their journey and offer them seamless and secure experiences.

Schedule a demo

Let our expert team guide you through our identity verification and authentication solutions. Select a date and time that works for you.

Schedule a demo

Find out how we can help you deliver seamless and secure customer experiences that comply with PSD2/SCA. Select a date and time that works for you.

Interested in more information about Prove Pre-Fill?

Download the Report

Download Aite-Novarica Group’s full report about Prove Pre-Fill, including a product overview, customer results, and how the product works.

Interested in more information about MFA?

Download the guide now to learn how you can improve security, cut down on fraud, and create the best possible customer experience.