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 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]

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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 (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

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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). Ability to use interactive would increase. However, Telegram users started using proxy facilities in providing a variety of services, servers to access the application. The frontrunner in domestic including messaging and finance (such as official apps in terms of subscribers is Soroush with over 12 million. channels of companies and organizations, sales The second - according to its own figures - is Gap, with 2.6 channels of goods and services, etc.). Permanent, million subscribers. Eitaa has one million, iGap 650,000 and secure and convenient access to a combination of BisPhone plus 600,000. banking services, such as receiving and paying money, bills, etc. for individuals and legal entities. Special financial services in official channels and smart assistants (Bot). Pay for online services and charge credit using the payment Bale platform) Bam (Another melli bank services): Based on Sadad informatics corp. with smart SOA policy this Widget-Based application started from 2015 (By JAVA technology). The customer will also be able to personalize the services received to a certain level, which means that the services and information provided to each customer will be personalized according to the customer's circumstances and group.

Functions:

Retail Banking Corporate Banking Personal Financial Management (PFM) Figure 3. Growth in domestic applications subscribers (around the ban Mobile banking on Telegram-April 2018- Users in million) API Banking 2. Wepod/Kipod (Pasargad bank):

Due to the need to move in the field of social banking and in order to increase customer satisfaction, Pasargad Bank has In this part we introduce some of these new social media designed and developed a new product in the field of digital platforms related to banks: banking called "wepod", which is a social network to facilitate financial interactions between People via mobile number. 1. Bale (Melli bank): This application has some services such as: Bale application (Means: Yes) is the new service which has A) Banking services just by cellphone number. Money been launched by Melli bank and it was selected as the best transfers between Wepod users without the need for applications for the customers category (Dr. Nourbakhsh a card number can be done easily just by having a festival). Bale is a mobile service for text messaging which person's mobile phone number. It is also possible to can provide other services like payment of bills or purchase of transfer money by scanning the QR Code at the other services. Over 7 million people use this application moment. (Based on Melli bank website) and head of Bale argue that B) Ability to transfer from wallet to card or other since Google Play has accepted them, they have passed people's account (Sheba/ IBAN). security standards. Also, users can send pictures, videos and C) Dongi group management (Sharing): By creating a voices by this application. Dongi group, you can enter all the expenses

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incurred by the group members to purchase a talk is a free mobile application for with product or manage expenses. Wepod determines the free text and free call features, launched by Kakao share of each member of the group and then allows Corporation. It was developed on March 18, 2010 and is you to request payment and settlement in the group. currently available on iOS, Android, and etc. Also, it has 49 D) Ability to create main payer group: To buy a service million monthly active users. Kakao branched out, adding a or product, you can create a main payer group. By social network called KakaoStory, a gaming service, premium entering the expenses incurred and calculated by accounts (called “YellowID” or now, “Plus Friends”), and Wepod, each person's share is determined and all even a mobile payment service. Then in 2014, Kakao merged members of the group can pay and settle with the with another of Korea’s internet wunderkind, , to form parent. Daum Kakao. E) Ability to make a virtual gift card: With the digitization of many processes and the possibility of online shopping, the preparation of a physical gift card requires a presence at the branch or ATMs of the gift card. On Wepod you can save your time for your friends or family by buying a virtual gift card in addition to giving a gift. F) Ability to upgrade the user level: Wepod services have different levels. The more you use Wepod services and the more authentications you provide to Wepod, the more access you will have to Wepod Figure 4. Kakao talk history features and the higher your transfer limit. Do not worry about the security of your information; Kakao services: because all security principles are observed to protect your information.  Portal (Daum, Daum News, Daum Search) G) Pay bills: You can quickly and easily pay your bills  Communication (Kakao Talk, Kakao Story, Daum and save your time on Wepod just by entering the Mail, Daum Café, Agit, , Brunch, Melon bill and payment ID or scanning the QR Code. Aztalk, Kakao Mail) H) Online chat support: If you have a problem or  Contents( Kakao Page, Kakao TV, Kakao Music, question while using Wepod, you can talk online , Daum Webtoon, 1boon, Melon, with support and fix your problem. Melon Ticket) I) Security: In Wepod, your banking and personal  Commerce (Kakao Talk Gift, Kakao Style, Kakao information is encrypted at the highest level of Talk Shopping, Shopping How) security and stored in Pasargad Bank's data center.  Game () If you sign in to your account with a new device,  FinTech (Kakao Pay) you will receive an SMS notification and you can  Mobility & Life (, kakao T driver, Kakao see the devices that have access to your account. Navi, Kakao Map, Kakao Bus, Kakao Metro, Kakao J) Choosing friends easily on Wepod: In order to make Hairshop) the application easier to use, by entering the Wepod  Social Impact (Kakao Together, Kakao Makers) software, the information of your mobile contacts in the Wepod friends section is automatically Daum was more like an AOL back in the day, offering a synchronized. This way you can view your Wepod plethora of services like mail hosting, webpage hosting, video and non-wepod friends and add your new contacts hosting, a search portal, maps, and a particular kind of forum in the same section. still popular in Korea called “cafes.” K) Properly categorized financial statements: You can KakaoTalk is still a darling of Daum Kakao. As of September, receive various reports on Wepod and manage your 2016 KakaoTalk has 49.1 million active users worldwide. account more easily. For example, you can see all Facebook has about 16 million monthly active users in South your expenses and payments in the Dongi or Main Korea, and KakaoTalk has 41.49 million. That’s 41.49 million payer groups. in a country of 50.62 million. Think about that for a second. L) Ability to put a password on the software: You can Between the acquisitions and launches, Kakao Corp. now keep your Wepod information secure, or in other offers 20 different apps for iPhone, and number of services words, your mobile digital bank, by encrypting the accessible in the KakaoTalk app itself. In the transportation Wepod software or defining your fingerprint. category, now there’s GPS app KakaoNavi, trip planners

KakaoMetro and KakaoBus, even a taxi hailing service called 3. Jam (Mellat bank): KakaoTaxi. In lifestyle, Daum Kakao has a grocery shopping service, a food delivery service, a fashion and style shopping platform, and a domestic travel guide. There’s a Korean- 4Social media applications in Korea (Kakao language version of Medium called Brunch, and a private Talk): team chatting platform called Agit.

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Kakao has not just one, not two, but six different social Daum (Korean: 다음) is a South Korean web portal. networking apps, with no signs of slowing down. Sometimes It offers many Internet services to web users: it feels like the list of categories Kakao doesn’t operate in is including a popular free web-based e-mail, shorter than the list of ones it does. Well, maybe it is, but it’s messaging service, forums, shopping, news and also effective. It’s not just that KakaoTalk has reached virtual webtoon service. Its popularity started when it 100% market penetration in South Korea. It’s that in an merged with the then most popular e-mail service, average month, Koreans are spending almost 850 minutes in daum.net or hanmail.net. After the merging, Daum KakaoTalk. Compare that to the paltry 28 minutes a month started the forum service Daum Cafe which brought surveys reveal they spend with . its firm status in the market. The term cafe and even internet cafe (Different from what is supposed to In the first quarter of 2017, Kakao saw about $393 million in refer to in Western usage) is now used as the revenue, $198 million of which were from content including synonym for "Internet forum" in Korean. KakaoTalk’s marketplace, and $34 million in B) Communication: operating profit. Perhaps the most interesting part about Free chats that are more reliable than text Kakao is that in just a year, the company has seen a big shift and available anytime, anywhere, twenty-four in revenue source. In the first quarter of 2016, the majority of seven, with as many people you want. Kakao’s revenue was driven by transactions on it services. In a year, that’s changed. It’s now Kakao’s content — Kakao story give a thumbnail sketch of your story and follow , games, music, and even online comics — that the news that you're curious to find out at Kakao Story. seems to be fueling a good half of Kakao’s engine. Kakao Talk Cheez: Create the best-looking selfie ever with face recognition stickers, profilecons, beauty filters and a squircle image guide.

Daum Mail: Unlimited inbox size which keeps increasing. The inbox capacity will automatically increase as you need more space. You don't have to worry about your inbox being full.

Daum Café: Daum community service: Tens and millions of people have met up at Daum Café since 1999. People with similar interest gather at Daum Café to exchange information, share hobbies, relax and socialize.

Agit: Effective Way to Work & Communicate for Teams.

Tistory: with Tistory you can make a blog for yourself

Brunch: It’s a place you can write and publish it.

Melon Aztalk: communicating with other fans on your artist's channel (Enjoy fangirling/fanboying). Figure 5. Kakao revenue Kakao Mail: Check your email from Kakao Talk. AniPang was a casual Candy Crush-like game users could play through KakaoTalk. It became a craze in Korea in 2012, C) Contents and the hit eventually migrated to other countries like the Philippines by 2014. Kakao Page: Kakao Page is Kakao's main content platform for webtoons, novels, bestsellers and movies. Because KakaoTalk connected users with their pre-existing contacts, Kakao’s social games were able to connect users Kakao TV: You can be a friend with Kakao TV stars. with their friends automatically on a virtual scoreboard. Kakao Music: you can add your favorite songs to Music Within a year of the game platform’s launch, KakaoTalk had Room and share them with friends. generated 400 million game downloads and expanded its user base to 30 million. Gaming has become a key component of Kakao Friends: Kakao Friends, cute and colorful characters messaging for the Korean market, and again KakaoTalk had that are loved by all. an early advantage. Daum Webtoon: Magical space where ideas transform into Facebook Messenger is currently the closest competitor to contents (well-developed stories and attractive characters). KakaoTalk, with roughly 30% of the market using Messenger frequently, but Facebook’s Instant Games platform is a 1boon: trendy contents provided by 1boon comparatively recent addition to the service. Melon: music platform/ music trends In this section we explain kakao platform by details: Melon Ticket: performances, musicals, and concerts from a A) Portal: variety of genres.

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D) Commerce platforms such as Kakao talk. Since almost all Korean use this platform, there are many services and applications in it. Kakao Talk Gift: Give loving gifts with Kakao Talk Gift However, people do not trust to domestic social media platforms in Iran. So, some banks such as Melli, Pasargad, Kakao Style: you can check out hottest styles and trends Mellat launched their platforms for their customers. It seems Kakao Talk Shopping: Check out special prices and exclusive that these banks should expand their platforms and it could be products, only available in Shopping. costly. If Central bank of Iran or a group of bank would launch a platform for all banks and financial institutions, it Shopping How: From price comparison to product could be cheaper and easier for banks and customers to use it. recommendation, Shopping-How will provide you with smart Nowadays, Fintech companies are so active in Iran and they shopping experiences can join to banks to develop better social media platforms. In summary, Iran has a great potential to improve social media E) Game platform since most of people use applications such as Kakao Games: RPG, quiz and more! Kakao Games has Telegram, Whatsapp, Imo and etc. And banks and financial over 500 games institutions can develop this area so fast.

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Although some Iranian bank have started their social media platforms, they are in the first step in comparison with some

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