A recent UN study reveals that rapid growth of social networks and e-commerce platforms has driven financial inclusion, economic activity and security in practically all countries and in particular China. The report highlights that popular applications WeChat and AliPay have developed into some of the largest and most sophisticated financial ecosystems in the world. For example, AliPay was first launched in 2004 and by 2016 AliPay was processing 175 million transactions per day, and more than half through a mobile phone.
Social networks continue to expand their user base and broaden their services to keep users within their application for even more time. Social platforms integrate financial services such as peer to peer payments, customer service, robo-agents, digital wallets, credit scoring, and direct message banking. For example, a user can add a financial card to their social media account and send money to a friend using the text chat feature. Other platforms integrate with online retail store services and provide banking services so that customers can check their accounts, transfer funds and pay bills within the application.
Financial activity will attract different regulatory requirements. Compliance, security and privacy will be increasingly important for new financial services and activity within the social network. The global reach of these platforms makes compliance with financial regulations across multiple jurisdictions a complex task. Social networks and financial innovation will continue to offer new opportunities and risks must be managed to continue to drive growth. The way people communicate and transact will continue to evolve.