The Infonomist: Chat economy is on the way
According to Pieter de Villiers, the co-founder and chief executive of Clickatell, who leads the implementation of chat commerce for major banks locally and abroad, 80percent of banks will adopt chat commerce in the next 12 months. De Villiers shared his insights on the sidelines of the 2019 AfricaCom gathering at a launch of a book about the impact of chat commerce in banking, Bank 4.0.
Chat commerce and chat banking have revolutionised the way companies are serving their customers. Without having to invest in new architecture, companies are able to meet and engage with their clients on the platforms of their choice. What’s more, with one simple implementation, organisations can boost their customer penetration by a factor of three.
For businesses in Africa, this next generation of commerce has proved to be the best way to overcome infrastructure and socio-economic challenges and local businesses are quickly embracing the opportunity.
As an early adopter of technology, the banking industry has some important lessons to offer other business sectors. Current developments in the banking sector are an early indicator of what will happen to other business sectors. Banks in particular have leapt at the chance to quickly and easily reach their customers with this frictionless service.
Serving 15000 global businesses and having completed a number of implementations in the financial services sector, Clickatell has first-hand experience of how chat banking has rapidly taken off, with Africa leading the way.
To understand the significance of the chat economy you have to look at recent product innovations by some of the leading consumer technology companies. Most of them have identified chat as an area of focus.
Facebook just announced Facebook Pay, which will be enabled via Messenger, a chat platform within Facebook. Tencent, with WeChat, is currently leading the chat economy revolution in China. Payments on all these platforms are enabled within chat platforms and more tech companies are introducing their own chat platforms.
Absa with Chatbanking in South Africa became the first bank in the world to enable banking within WhatsApp, and others are implementing similar strategies. This development is one of the reasons why banks are in the process of closing branches. They have realised that their clients have limited reasons for visiting a branch.
Current interaction between banks and banking clients is enabled via chat platforms. Young people who are also future clients of banks are the major driver of this development. Banks, however, are not alone in implementing chat commerce strategies. Major telecommunications, utility, media and travel businesses are also in the process of implementing chat commerce strategies.
Current developments in the banking sector as well as the focus on chat platforms by technology companies should serve as a warning sign for businesses today. Banks that do not implement chat commerce strategies will be left behind. This is also true of businesses that are slow at adopting chat as the competitive advantage. African businesses should pay more attention to this development.
According to De Villiers the nature of transacting over a chat platform makes it a perfect mechanism for the African region. Consumers in these markets often have limited data, making the downloading and use of apps a hard sell for many companies.
Wesley Diphoko is the editor-in-chief of The Infonomist. You can follow him via Twitter: @WesleyDiphoko