Journal of Economics and Environment Volume 1, Issue 1, 2020, Pages: 18-25 J. Econ. Environ. Journal web link: http:// www.dormaj.org/index.php/JEE https://doi.org/10.47277/JEE/1(1)7 Banking on Social media: Compare Korean and Iranian applications Majid Lotfi Ghahroud1*, Seyed Mohammad Hossein Mahmoudi2, Leila Saroukhani3, Rohollah Khalil khani4 1- Business school of Hankuk University of foreign studies, Seoul, South Korea 2- Head of personal banking department, Mellat bank, Iran 3-Vice president of personal banking department, Mellat bank, Iran 4- Expert of personal banking department, Mellat bank, Iran Received: 15/02/2020 Accepted: 10/03/2020 Published: 19/03/2020 Abstract Social media are the main part of the IT trends of the technology world together with mobility, big data, cloud, AI, and others. As a matter of fact, Banks and financial institutions are aware of the power of social media and its benefits for their businesses. In this paper, we aim to explore some alternate delivery channels such as mobile banking and social media and their potential opportunities for the banking industry in Iran. In addition, we compare some social media applications in Iran and Korea. Keywords: Banking, Social media, Banking on social media, Social media application 1 Introduction1 Recently, most Banks and financial institutions interact more 2 Literature review with their customers through the social media, particularly Social media are a part of the top IT trends of the technology Facebook and Twitter. Also, financial industry is increasingly world together with mobility, big data, cloud, AI and others. using information communication technology (ICT) in the The emergence of financial and nonfinancial companies using form of alternate delivery channels (ADCs). The terms like social media has changed the way people buy and sell goods telecommunications and computer technology is generally or services search for product and service information and defined as ICT (Bowman and et. al., 2005). ADCs are interact with companies and other customers (Garcia- methods that are different from traditional bank branches and Moraleset al., 2018; Correaet al., 2010). To manage their banks use them to meet their customers’ needs. Also, adopting customer relationships, companies, banks and financial ADCs enables banks to expand their market share and profit institutions make use of a wide set of social media platforms (Kauffman & Kumar, 2008). One of the first ICT technologies such as blogs, websites, forums and social networking in banks has been the ATMs. The ATMs provide financial websites. Applying social media does not only offer some self-service access for customers (Bellis, 2010). Some other unique opportunities and chances to interact (Kaplan and popular and famous alternate delivery channel technologies Haenlein, 2010; Hanna et al., 2011), but also provides an include service such as: short message service (SMS) banking opportunity to achieve marketing aims with a lower cost text alerts (For important news), automated clearing house (Felix et al., 2017). While social media is most actively used, (ACH) electronic payments (Core sys), bill pay (Online applied and controlled by the hospitality, pharmaceutics and payment), mobile banking (with many services), e-mail alerts manufacturing industries (Adweek, 2018), it must be taken and notifications, fax banking services, video banking, and into consideration that the finance section specially banking online social media banking (New service). Banks can employ industry is also rapidly growing. In fact, they are valuing this these technologies that are all related to ICT and ADC media not only as a means to reach out to customers but also strategies (Koltveit, and et al., 2000). This study aims to to conduct business (Parusheva, 2017). A new study by the show the difference between banking on social media in Iran American Bankers Association (2017) shows that 74 percent and some foreign countries with local or global social media. of banks value themselves as being active on social media, while 76 percent agree that utilizing social media is essential for banks and financial institutions. Also, it shows that banks use social media mainly for communication, advertising, risk 1 *Corresponding author: Business school of Hankuk University management and customer service goals (Garanti et. al., of foreign studies, Seoul, South Korea, E-mail: 2019). [email protected] 1 Journal of Economics and Environment Volume 1, Issue 1, 2020, Pages: 18-25 As a matter of fact, Banks and most financial institutions are While there are growing and new application that received aware of the power of social media and they are active on financial support, they have long way to go to catch up with social platforms to make more money. In banks’ practice there Telegram (with over 40 million users in Iran). are 4 main models for applying and using of social media banking such as use of social platforms as a marketing tool, as Companies and organizations behind social media a communication channel, as a channel for feedback and the local apps: reactions and for transactional social banking, where banks allow their customers to realize active operations and actions. A. Soroush In addition, worldwide there are already present successful examples from banks to implement transactional social The most popular app is currently Soroush, with over 11 banking (Parusheva, 2017). It is clear that the important role million subscribers. Soroush was launched by the of social media in the marketing strategy of a company is Soroush Resaneh Institute in 2017. The institute is undeniable (Macarthy, 2018) and a huge number of belonging to Meysam Seyed Salehi, (CEO of Fan Ava companies are now reaching out to consumers through social Data Centre). Based on reports, Islamic Republic of Iran media (Okazaki and Taylor, 2013). While this is so important, Broadcasting (IRIB) was a stakeholder in the institute some companies are more successful than others in their and provided technical support to the application. ability to communicate with their customers on social media (Hanna et al., 2011). A successful and growing social media B. iGap communication strategy requires mindful adaption, community building and absorptive capacity (Culnan et al., iGap was launched by the Rooye Khat Media Company, 2010), showcasing the distinctive characteristics of the stablished in 2015 with the goal of creating modern organizations on social media (Leonardi and Vaast, 2017) and communications and information platforms. The company is effectively adopting the personification approach (Men and belonging to Mohammad Rasoul Kazemi, he use just his Tsai, 2015). Therefore, “the set of human characteristics personal money to develop the application. iGap signed a associated with the brand” (Aaker, 1997)–or simply “brand contract with two private banks, Parsian and Pasargad later. personality”–has an undeniable role in creating successful communication on social media (Hu et al., 2018) and it helps C. Gap organizations handle and manage brand perceptions (Xu et al.,2016). Moreover, according to the study of Walsh et al. The Towsee Saman Information Technology Company - (2013), users of social media develop and expand much which was developed in 2004 (Services: web solutions, e- higher perceptions of brands’ personality and image than non- commerce, games, and information technology - developed users. the Gap messaging applications). The company is based in the Mashhad and also has a UK office in Hove, Sussex. Mahdi Anjidani, (CEO of Gap), claimed that the application offers several services such as flight tickets, hotel bookings and 3 Social media applications in Iran utility payments. Since most of people use Telegram or WhatsApp or IMO applications in Iran, Iranian banks cannot use them for their D. Eitaa social media platform (The server is not in Iran). Although, there are some internal and local social media applications in Launched by Andishehyavaran Tamaddon Emruz, the Eitaa Iran such as igap and Soroush, people do not trust them. So, application is a social media application. Morteza Mousavian, some banks such as Melli bank and Mellat bank started to (the director of the organisation) claimed that Eitaa launch their social media platforms. application did not received financial or technical support from the state. E. BisPhone Plus BisPhone Plus app was launched by Tarashe Sabz Tehran, a leading internet company active since 1999. The company developed some services such as VoIP, IPTV, bandwidth and messaging app services, as well as international calls. F. Others (BALE, HODHOD and etc.). There are a number of other applications which are active in Iran, but they have few number of user. They include Bale, which is thought to be sponsored by Melli Bank, and Hod- Figure 1: The most famous local and international application in Iran Hod. Generally, Local apps require a mobile number for activation, just like Telegram. Their interfaces bear a remarkable resemblance to Telegram, though some also offer additional 2 Journal of Economics and Environment Volume 1, Issue 1, 2020, Pages: 18-25 services, such as financial transactions within the Iranian Bale functions (Based on Sadad informatics corp.): banking system and it’s a common service. Social financial services Money transfer in seconds Buy, pay and send receipts on the platform Send money request in chat Types of application services The application is divided to 3 sections: 1- Social financial services (Transfer money, social payment, request for money, users services) 2- Group chatting services (Group and personal chatting, sending and receiving pictures, videos and voices, web-based version and Android and IOS version, strong media for businesses by API) 3- Interact and message services (Extensive and Figure 2. Services offered by domestic applications interactive communication with various service providers, in an open and powerful context. Ability to use smart assistants (Bot) and a variety of After the ban on Telegram (on 30 April 2018), it was expected efficient programming interfaces (APIs) (for that the number of domestic social media application users different languages).