Social Media Adoption among the Banking Sector in Sri Lanka

Parakum Pathirana MSc, FBCS, CISA, CISM, CGEIT, CISSP, ISO 27001 LA, MCP, CHFI, QCS, ITIL, CCSK Head of IT Security & Compliance – Lanka ORIX IT Services President – ISACA Sri Lanka Chapter

Disclaimer

• I’m employed in the #infosec industry, however not authorized to speak on behalf of my employer/ clients

• Everything I say can be blamed on the voices in your head

My credentials • 9+ years in #Infosec field

• Tutor, consultant/ advisor, auditor, head of InfoSec

• Sectors: financial, leisure, manufacturing, advertising, gov, insurance, etc.

• Crazy about #cycling, #infosec, #socialmedia

• Still learning and not an expert at anything

• lk.linkedin.com/pub/parakum-pathirana/2/a52/2a2/

Social Media Revolution

• Facebook exceeded 1.11 billion monthly active users, and daily active users passed 665 million (PR Newswire, 2013).

• Only 14% of consumers trust advertisements and they are more likely to trust peer recommendations (Qualman, 2012).

• Commonwealth Bank launched its smartphone banking app Kaching as a social app that can be accessed from within Facebook (2012).

• Navy Federal Credit Union in United States generated nearly $96 million in new loan businesses and $90 million in Credit Default Swaps (CDS) entirely on Facebook in 6 weeks (The Financial Brand, 2013).

• The ATOM Bank (2015)

Social Media Revolution

• Incident 1: United Airlines broke Dave Carroll’s guitar in 2008 : 15+ million views

• Twitter: JP Morgan Fiasco

• YouTube: 300 hours video uploaded every minute (2015)

J.P. Morgan Twitter Fiasco

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Social Networks Users worldwide

Source: eMarketer, 2013

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Social Network User Penetration worldwide

Source: eMarketer, 2013

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Sri Lankan Context

Attribute Sri Lanka Indonesia Malaysia

Total population 21,675,648 251,160,124 29,628,392

Internet users 3,927,948 72,700,000 19,200,408

Internet penetration 18% 29% 65%

Active Facebook accounts 2,000,000 62,000,000 15,600,000

Facebook penetration 9% 25% 53%

Active mobile subscriptions 20,324,070 281,963,665 41,324,700

Mobile subscription penetration 94% 112% 139%

Percentage of mobile subscriptions that are 3G connections 13% 22% 43%

Number of active mobile broadband subscriptions 953,000 80,100,000 4,000,000

Mobile broadband subscriptions as a percentage of the total

population

4.4% 32% 14%

Active social media users accessing social media on a mobile device 1,400,000 52,000,000 13,000,000

Penetration of mobile social as a percentage of the total population 6.6% 21% 44%

Source: We are Social, 2014

Sri Lankan Context (Cont’d) • 6 billion LKR mobile money transactions during 2013 using a single mobile

operator (Daily FT, 2014).

• IT Literacy rate increase from 2010 to 2011 => 20.3% to 35% (Ministry of Finance and Planning, 2013).

• Only 27 finance companies (out of Brand Finance Top 100) had a Facebook page icon on their homepage, 14 Twitter and 10 YouTube (Thajudeen, 2012).

• School children committing suicide involving Facebook related incidents (Imtiaz, 2014).

• More mobile devices than tooth brushes in Sri Lanka (Fernando, 2013)

• Pivotal role played by Social Media in Presidential Elections in Jan 2015 (Gunawardene, 2015)

• Over 20% of population lack financial inclusion

• The domestic savings rate is still at 20% (Sunday Observer, 2015) leaving a wide domestic savings gap in the path to reaching and maintaining an 8% economic growth

• ADB has drawn attention of the policy makers to focus on innovation and the needs for a knowledge economy at the threshold of gaining upper middle income country status

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Financial Sector and Social Media

• Findings from the Fairbanking foundation study (Leadbeater & Elliot 2013)

– reputation of bankers are low

– questionable business models, culture and values practiced by banks leaving the customer interests aside

– Need to go back to basics

– Need to be more intimate and transparent

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Rise of Social Media and demise of financial sector popularity

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Financial Sector and Social Media • Match made in heaven? Or ?

– Similarities

– “Many talk about it? Few are doing it and those that are, aren’t doing it that well, with one or two exceptions”

• Realities – Marketing of financial products are highly regulated

– Financial crisis & potential customer backlash

– Lost of customer trust

• “In 1983, 90% of public agreed that banks in Britain are well run, compared to 19% in 2003” – (British Social Attitudes Survey, 2004)

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Social Media potential in the finance sector

• 25% of respondents felt that social media offers a new way to communicate to tomorrow's consumers

• 57% of financial services professionals are interested in social media

• 41% interested in discussions of their brand on social media

• 30% see social media as the future of communications

• 81% feels that Twitter is more important than Facebook or LinkedIn

15 (Cicero Consulting, 2012)

Untapped potential

• Nearly 60% think that their industry has so far not been effective in utilizing social media

• 38% are concerned that they are missing out due to lack of time and resources dedicated to social media

• Less than half of surveyed firms are making effective use of social media, and a tenth are not even considering how they could do so

16 (Cicero Consulting, 2012)

Objectives of the study

• To examine and find out the casual factors affecting the consumers adoption of social media for banking services

• To analyze the impact of attitude towards using social media and social media adoption among the baking sector in Sri Lanka

• To analyze if knowledge and age performs a mediating role among behavioral intention to use social media and social media adoption

Significance of the Study

• Both the banking sector and social media represents mutually supportive forces which could be harnessed for mutually supportive outcomes

• Public trust on the banking sector continues to decline (Leadbeater & Elliot 2013)

• Growth of the financial sector will play a pivotal role in the development process of Sri Lanka

• Banking sector profits in Sri Lanka have declined in 2013 to 74.6 billion rupees after tax, approximately 9.6% drop in comparison to 2012 value of 82.7 billion rupees (SundayTimes, 2013)

Literature Review

• Economic Theory

• Modernization Theory

• Diffusion of Innovation Model

• Technology Acceptance Model

Conceptual Framework

Q & A