WhatsApp has 450 million active mobile users. JPMorgan Chase & Co. has 15.6 million, most among any bank in the US. WhatsApp has 32 engineers. JPM employs 260,000. That’s the deficiency of banks in a nutshell. If you don’t “get” why Facebook has agreed to pay around $19 billion for WhatsApp, you don’t get the future of banking. The future, put succinctly, is social mobile. The new technology order is built on MAUs, mobile active users. More than 70% of those 450 million WhatsApp MAUs are daily MAUs. The app, in and of itself, creates its own social sphere, and it is for this social sphere that Facebook, which has nearly 1 billion MAUs, is willing to spend 10% of its current market capitalization. It has become apparent that certain mobile apps, such as WhatsApp and Instagram (both now owned by Facebook), are spinning up vast social webs. The mobile device is such that the social networking there ends up centering on specific apps, rather than across a bundle of applications, like on the web, as evidenced by Facebook’s bundle of services. (There are several reasons for this, which are beyond the scope of this post.) However, if banks do not realize that mobile [...]
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