Facebook has recently announced it’s getting ready to launch its digital wallet Novi. The social media giants’ first foray into finance, Novi has the potential to disrupt the banking industry globally. Through using its already created cryptocurrency Diem, users can send and receive money internationally for zero transaction fees. With the potential to revolutionise the way people bank by moving their banking to the social media apps they use daily, Novi is delivering on consumers’ calls for – easier and more digitised banking. In fact, digital banking in the US alone will surpass 200 million users by next year, meaning more than 75% of the US population will be banking digitally.
While Facebook’s digital wallet is capitalising on consumers’ desires for a better digital banking experience it’s also targeting its product to the unbanked, an area finance brands can learn from. With over 1.7 billion people in the world being categorised as ‘unbanked’ this opens up a large pool of consumers Facebook has access to and can market towards. So, what can finance brands learn from Facebook’s transition into financial services and how may it affect your brand?
Why the transition to finance is a great move for Facebook
Facebook has close to 3 billion users that are pre-authenticated and ready to potentially use its digital wallet. To add to this, Facebook has over 200 million small businesses utilising its tools that also have the potential to accept its cryptocurrency, Diem. This gives Facebook the opportunity to create and distribute a payment system that could overtake many small and large financial services, revolutionising the finance world.
As the pandemic has accelerated the digitisation of the financial world, Facebook’s wallet can capitalise on the growing demand for easy, seamless, digital banking. With 4 in 5 customers preferring to bank digitally, Facebook’s digital wallet is making it easier than ever to do so. With customers able to send and receive money through Facebook’s WhatsApp and Messenger apps, they’ve made banking as easy as sending a message.
Finance brands can take inspiration from Facebook’s digital wallet by implementing easier pathways to contract new clients. By enabling the customer journey to be made simpler you can encourage time-poor consumers to choose you over your competitors, especially when combined with a strong digital platform and online presence.
Facebook’s digital wallet is targeting the unbanked
The unbanked are a key demographic that Facebook’s digital wallet is targeting. With close to 1.7 billion people making up the unbanked community globally – 62 million of them being Americans, 3 million Australians and 1.3 million Brits – this is a large resource financial services can tap into. The pandemic has presented a prime opportunity with economies around the world transitioning from a cash to digital medium. Facebook may be considered a great option for the unbanked as they offer no transaction fees and are already integrated across platforms that are widely used.
Leading Facebook’s digital wallet, David Marcus believes that Novi will revolutionise the finance industry and cater to the unbanked more than any other financial service. “We feel that it’s unreasonable to delay delivering the benefits of cheaper, interoperable, more accessible digital payments.”
“ We feel that it’s unreasonable to delay delivering the benefits of cheaper, interoperable, more accessible digital payments. ”
With more and more people shifting from a cash economy to a digital one, it’s never been more important for traditional finance brands to begin targeting the unbanked population. The unbanked provide the opportunity to finance brands to improve their revenue and tap into a new and profitable markets. Here are four ways your finance brand can tap into the unbanked market:
- Eradicate barriers
- Integrate your financial services into easy-to-use mobile apps
- Increase your educational content
- Remove the need for individuals to visit physical stores
What are the take aways?
Facebook’s digital wallet does showcase a variety of areas your finance brand could improve to continue to remain competitive in a rapidly changing financial environment. Creating an omnichannel digital experience could entice new clients and capture the attention of interested consumers. To add to this experience, with the pandemic accelerating the digitisation of the finance world, it’s imperative your finance brand builds a simple online platform that has your users’ needs at the forefront. Reducing barriers to consumers in the customer journey can both attract new leads and cater to the large unbanked community. When Facebook’s digital wallet launches it’ll be interesting to see the public’s response and what further changes the finance industry will undertake to remain competitive.