“Giving Facebook access to personal financial data is risky”: Who really benefits if Facebook has our financial information?
Facebook has been going through a tough time lately, to say the least. It recently saw a drop of 20% in value, losing $120B after announcing that revenue growth will take a hit moving forward. This is the latest incident in a hellish two year period which has seen the social media giant struggle through a number of scandals and issues.
Therefore, it is fair to say that headlines of Facebook wanting to obtain users financial info probably won’t be well received by the public or its users. Despite Facebook denying claims of approaching banks for customers’ financial data, there was a lot of attention drawn to the idea that it would be stricktly used for its messaging service, Facebook Messenger
“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 & Co., Wells Fargo & Co., Citigroup Inc. and U.S. Bancorp 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,” states the Wall Street Journal.
However, given the billions of users Facebook has amassed, it is clear that not everyone has an issue with their data being used in exchange for convenient or enjoyable services.
To get a better idea of what it could mean for users if Facebook had access to their financial information we spoke with Drew Sementa, CEO of Tidal Commerce, a merchant services company, who said “Giving Facebook access to personal financial data is risky and isn’t a fair trade for consumers. The risk of a breach and mismanaged data are too high to exchange for easier eCommerce transactions (imagine one-click purchases directly within Facebook) and easy access to information (getting instant checking account balances, etc.) — especially with integrations from Shopify & more adept banking apps that allow some of these functions already without private data being exchanged, albeit with some extra steps involved.”
He adds “For consumers, it’s worth asking how much we value convenience, and for businesses whether or not this move will be advantageous. If your business is already using Facebook as its central information and selling hub that simply redirects to product pages and checkouts, then these additions could be quite valuable to you, but for the many businesses that prefer to communicate and foster relationships on their own platforms outside of Facebook, where they aren’t reliant on an algorithm that changes constantly or the inability to upsell easily, then this could force them to adjust their strategy for better or worse.”
As expected, a future where Facebook has our financial info looks to benefit Facebook the most, while potentially risking our security for the sake of some extra convenience. At the end of the day, the most important question we need to ask ourselves is – is the convenience really worth it?
Disclosure: This article includes a client of an Espacio portfolio company