Disrupting Traditional Banking
  • 14th August, 2018
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Disrupting Traditional Banking

By Phil Massie

In my last post I discussed the open banking paradigm currently gaining traction across Europe. While it’s unlikely that we will see South Africa’s banks relinquish their hold on their data any time soon, some already expose APIs to industry. With Absa’s recent launch of ChatBanking, it seemed an opportune time to take a quick look at how the system works. A disclaimer: I don’t bank with Absa and haven’t had the opportunity to use the service first hand.

ChatBanking allows the bank’s clients to perform a variety of transactions via the WhatsApp chat client. Currently these transactions include balance enquiries, mini-statements, beneficiary payments, loyalty program points queries and redemptions, mini credit reports as well as airtime, data and SMS bundle purchases. The usage appears fairly straightforward: The user adds a ‘virtual teller’ phone number to their contacts, and starts a chat. An account needs to be linked and the device needs to be authenticated but this can be achieved with the bank’s banking app. From then on, you simply initiate transactions from the chat client. 

Facebook assures us that WhatsApp messages are encrypted so only you and the virtual teller should be aware of your message contents. The virtual teller side of this interaction is handled by Clickatell who manage the banking integration with Absa. Clickatell, a South African company now based in Silicon Valley, works in the global digital communications space, leveraging SMS and text messaging platforms. They provide many services including SMS authentications and alert systems, from domestic use to industrial applications like system errors and alarms. They recently signed a deal allowing them to add the WhatsApp Business Solution to their arsenal. They have integrated WhatsApp solutions into their customer engagement offerings and by integrating with Absa, they have built an innovative financial services tool. Not only can you transact via the client, you can receive all manner of useful alerts like irregular account activity, fee transaction or credit limit notifications.

This isn’t the first implementation of WhatsApp business financial solutions. In India, a country with roughly 200 million WhatsApp users, Facebook (the owners of WhatsApp), in partnership with large banks, rolled out WhatsApp Pay this year. The pilot project reportedly had roughly 1 million users by February and received positive reviews. Despite some tentative steps toward more fully integrated banking solutions in India, Absa touts itself as the first bank in the world to fully roll out WhatsApp banking services.

Apart from the convenience of using a familiar client to perform your transactions, with some cellular providers including bundled whatsapp plans, the approach may also represent a more cost effective banking solution for many people. Further than that though, it delivers disruptive approaches to traditional tasks. It’s a long way from open banking, but it seems like a step in the right direction. Surely we will see other financial institutions following suit, partnering with tech firms, leveraging data and solving increasingly meaningful problems.

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About Author

Philip has worked as a consultant on several marine research projects and as a research assistant on a study assessing history and current fluctuations in maritime populations. His M.Sc. in conservation biology resulted in a publication on the behaviour of female southern elephant seals, a species that was once almost hunted to extinction. He is passionate about data-driven research and has outstanding data analysis and data visualisation skills.

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