Facebook Presses Banks For Customers’ Financial Data

Over the past year, the social media company Facebook has been asking banks for some of their customers’ financial information, such as credit card transaction data and account balances. Facebook hopes to enter the digital commerce market by enabling people to use Facebook Messenger as a payment platform. The company seeks to compete with the likes of Venmo and Zelle.
Banks have not responded to Facebook with unequivocal enthusiasm, however. The Cambridge Analytica debacle, in which the research firm collected data on 87 million Facebook users without their consent, has made banks cautious. JP Morgan Chase, Wells Fargo, Citigroup, and U.S. Bancorp are all waiting to see how data privacy issues develop, while Bank of America has declined Facebook’s request.
Sean Claessen, executive vice president of strategy at Bond Brand Loyalty, weighs in on the issue. “They’re still in the proverbial privacy penalty box,” he says. “This is a severe over-estimation on Facebook’s part of the state of its brand’s relationship with users of the platform. Mark Zuckerberg seems completely unwilling to assume responsibility for what his company has already created, and hardly has license to extend the relationship any further into even more guarded data territories like banking information and credentials.”
Claessen adds, “By our own data, from members of countless global programs, platforms, subscriptions, etc., this would well cross the line on the cool-to-creepy spectrum. They need a big symbol of earned trust—not promised trust—before they can even approach this topic with any success.”
News of Facebook’s outreach to banks comes in the wake of a 20 percent single-day drop in the value of its stock, which occurred last month. The $120 billion loss hit the company when CFO David Wehner reported that European privacy laws, user reticence to share data, and new advertisement methods had slowed growth. This month, stock value recovered by about 4.5 percent, but the company’s decreased growth, combined with the 2017 data breach, has certainly shaken investor faith.
To assuage the fears of banks and users, Facebook spokeswoman Elisabeth Diana says that the financial data the company seeks will not be used to direct advertisements at customers. “We don’t use purchase data from banks or credit card companies for ads. We also don’t have special relationships, partnerships, or contracts with banks or credit card companies to use their customers’ purchase data for ads.”
She continues, “Like many online companies, we routinely talk to financial institutions about how we can improve people’s commerce experiences, like enabling better customer service. An essential part of these efforts is keeping people’s information safe and secure.”
Since Google and Amazon have reached out to banks in a similar manner, Facebook isn’t pursuing an unheard of or even a very remarkable data collection strategy. The problem is that consumer trust in brands has taken a huge hit, and asking for more information in this kind of environment does not inspire consumer feelings of security. For trust to be restored, Facebook will have to keep consumer data very safe indeed.

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