Online and social media could help South African financial institutions target the youth and the unbanked in their strategy to expand market share Deloitte said on Monday (3 December).
Deloitte Digital director Andre Hugo said the "digital disruption" taking place in the local financial markets required a rethink of how banks engaged with the youth and unbanked.
This comes as the number of youths using social media platforms including mobile technology in SA continues to rise. Some banks have already responded by developing new delivery channels to target this market.
These include First National Bank (FNB) and Standard Bank, which has partnered with Mxit which claims to be Africa's largest mobile social media platform‚ to transfer and receive money via the platform.
FNB has also become the first of the big four banks to use Facebook as another platform to enable its customers to check balances‚ purchase prepaid products including airtime and perform a range of other banking functions.
Hugo said the financial ecosystems in the online and mobile social media space had already "leapfrogged" traditional brick and mortar branch banking models and were "eating at the markets these institutions have always thrived in".
He said mobile platforms were today providing the link between the digital divide of traditional monetary systems for the youth and the unbanked.
The most notable was micro-payments using airtime as the de facto
entry-point to a digital currency.
He said online and social media represented a huge opportunity for bold South African financial institutions that wanted to "step up to the plate" to deliver innovative financial products and services to the youth and unbanked.
Hugo said a recent survey commissioned by Deloitte Digital on Mxit through independent survey company Pondering Panda showed youth markets were aware of the importance of saving and investing.
But it found they wanted access to funds anytime and anywhere.