Facebook has not had a good year. First there was the Cambridge Analytica scandal and then its share price fell like a stone from a skyscraper. And yet, just a few days ago The Wall Street Journal reported that the social media megalith is asking major US banks to share detailed financial information about how customers spend their money, apparently to increase user engagement. What could possibly go wrong, as we like to say when we can see all kinds of catastrophes likely to emerge from what is made to appear simple and innocuous?
Hand over your data!
The banks it has approached are well known to all, even if we don’t live in the United States. They are Wells Fargo, JP Morgan Chase and Citigroup. Facebook has, according to the WSJ’s interview with banking insiders, asked them to hand over data, including “everything from customers’ account balances to their credit card transactions.”
What’s in it for the banks?
Why might the banks agree to collaborate? The answer lies in the mobile commerce where apps like PayPal and Venmo dominate the scene. The banks would like a slice of this action and Facebook could help them achieve it. The article reports that Facebook is offering the banks “a presence on its Messenger app”, which has around 1.3 billion users. Messenger users can send and receive money via the app, BUT, at the moment, if a user wants to connect the Messenger app with their bank account they have to ‘opt-in’ to do that. They can also use the app to get in direct contact with Facebook’s credit card partners. The suggestion is that Messenger could also offer the same kind of direct contact with the banks.
Trapped by Facebook’s Messenger app
It’s easy to see the benefit to the banks and to Facebook, which is hoping that such a service will mean users conduct all their financial transactions through Messenger. Apparently the fact that many users leave the app to go and check their account balances at their bank’s online service is annoying Zuckerberg & Co who would prefer its users never wander off. Facebook also promises that it would never use customers’ financial data to improve its ad targeting. There are probably a lot of people reading that and thinking, “If you believe that, you’ll believe anything.”
So far, the banks have declined Facebook’s offer, citing customer privacy as a concern. And they are right to be concerned about it, because Facebook’s track record on use of customer data is covered in mud and it has stuck.
Knowing what you know about Facebook, how would you feel about your bank handing over your data to such a company?