Since it’s starting to look like Facebook is slowly going the way of MySpace, the once flourishing social-media giant has now asked large U.S. banks to share detailed financial information about their customers. Information which could include card transactions and checking-account balances.
All this comes as Facebook is desperate to try to offer new services to users who pretty much either think the platform has become stale, don’t trust it anymore after many user privacy missteps or because of its censorship of right-wing media on their platform.
Here is more on this story via The Wall Street Journal:
“Facebook increasingly wants to be a platform where people buy and sell goods and services, besides connecting with friends. The company over the past year asked JPMorgan Chase JPM 0.03% & Co., Wells Fargo WFC 0.10% & Co., Citigroup Inc. C 0.01% and U.S. Bancorp USB 0.04% to discuss potential offerings it could host for bank customers on Facebook Messenger, said people familiar with the matter.
Facebook has talked about a feature that would show its users their checking-account balances, the people said. It has also pitched fraud alerts, some of the people said.
Data privacy is a sticking point in the banks’ conversations with Facebook, according to people familiar with the matter. The talks are taking place as Facebook faces several investigations over its ties to political analytics firm Cambridge Analytica, which accessed data on as many 87 million Facebook users without their consent.
One large U.S. bank pulled away from talks due to privacy concerns, some of the people said.
Facebook has told banks that the additional customer information could be used to offer services that might entice users to spend more time on Messenger, a person familiar with the discussions said. The company is trying to deepen user engagement: Investors shaved more than $120 billion from its market value in one day last month after it said its growth is starting to slow.
Facebook said it wouldn’t use the bank data for ad-targeting purposes or share it with third parties.
“We don’t use purchase data from banks or credit card companies for ads,” said spokeswoman Elisabeth Diana. “We also don’t have special relationships, partnerships, or contracts with banks or credit-card companies to use their customers’ purchase data for ads.”
Facebook shares climbed sharply on the news, up 3.5% around midday, marking the biggest gain since last month’s historic drop.
Banks face pressure to build relationships with big online platforms, which reach billions of users and drive a growing share of commerce. They also are trying to reach more users digitally. Many struggle to gain traction in mobile payments.
Yet banks are hesitant to hand too much control to third-party platforms such as Facebook. They prefer to keep customers on their own websites and apps.
As part of the proposed deals, Facebook asked banks for information about where its users are shopping with their debit and credit cards outside of purchases they make using Facebook Messenger, the people said. Messenger has some 1.3 billion monthly active users, Chief Operating Officer Sheryl Sandberg said on the company’s second-quarter earnings call last month.
Alphabet Inc.’s Google and Amazon.com Inc. also have asked banks to share data if they join with them, in order to provide basic banking services on applications such as Google Assistant and Alexa, according to people familiar with the conversations.
“Like many online companies, we routinely talk to financial institutions about how we can improve people’s commerce experiences, like enabling better customer service,” Ms. Diana said. “An essential part of these efforts is keeping people’s information safe and secure.”
Facebook has taken a harder public line on privacy since the Cambridge Analytica uproar. A product privacy team has announced new features such as “clear history,” which would allow users to prevent the service from collecting their off-Facebook browsing details. It also is making efforts to alert users to its privacy settings.
That hasn’t assuaged concerns about Facebook’s privacy practices. Bank executives are worried about the breadth of information being sought, even if it means not being available on certain platforms that their customers use. Bank customers would need to opt-in to the proposed Facebook services, the company said in a statement Monday.
JPMorgan isn’t “sharing our customers’ off-platform transaction data with these platforms, and have had to say no to some things as a result,” said spokeswoman Trish Wexler.
Banks view mobile commerce as one of their biggest opportunities but are still running behind technology firms such as PayPal Holdings Inc. PYPL 0.68% and Square Inc. Customers have moved slowly, too; many Americans still prefer using their cards, along with cash and checks.”
Although Facebook has taken a harder public line on privacy since the Cambridge Analytica fiasco where people’s information ended up who knows where by adding new ways to keep your private information safe, but let’s be honest here, it may just be too late at this point in time. In fact, I can’t think of anyone who would let their banking information be accessed by a company that picks and chooses what they let on their platform while they betray the trust of their users have that financial information.
The truth of the matter is that Facebook doesn’t seem to want to understand that it doesn’t matter how much they try, people won’t trust them again. They did social media extremely well until they let the left wing dictate their values, now they claim to want to become a commerce platform. But why? We already have Amazon, eBay, Letgo, OfferUp, CraigsList and many others. People won’t just hand over their information when so many other platforms are great at commerce.