Recent news that Facebook has been in discussion with some of the biggest banks in the world has caused a bit of consternation. On the face of it, a site that is concerned more with frivolous messaging shouldn’t also be the place where you go to deal with serious matters like your personal finance.
That view of Facebook is really only the façade. When you go past that surface layer, there’s a great deal of intellect that powers the social network and a huge amount of data processing, along with number crunching. Clearly there’s more to banking than that, but it’s a big part of what a bank will offer. Then start to consider how much information you’ve already provided to Facebook. Who knows you better, your bank or Facebook? It’s probably a fairly close call but for a lot of people Facebook would come out on top. If that’s the case, who would be better placed to give you financial advice? It’s probably the entity that knows you best.
The banking industry as a whole has gone through (and is still going through) a period of much needed change. Open Banking is set to allow a number of new competitors, with innovative approaches to serving customers, into the industry. Think about whether or not you use a banking app and consider how sophisticated it is relative to Facebook’s app. Also, think about how much later banking apps arrived on smartphones compared to the Facebook app. Facebook and other forward-thinking entities are more in tune with what customers want. You can do everything you want to do, at any time of the day, at your own convenience. No waiting on hold for the next available customer service representative.
Of course, this speed of access what necessarily be so easy to replicate with all the security measures that need to come with banking. Facebook will need to take tentative steps and it has already. Last year, Facebook introduced the ability to make payments via Messenger. Also, pre-Cambridge Analytica, Facebook had a relationship with financial institutions to allow targeted marketing based on spend behaviours. Banks sharing data isn’t uncommon practice.
The news that Facebook is in conversation with banks may have sparked concern, but if Facebook gets it right, it will strengthen its own business. By forcing the industry to be more competitive, this could also lead to better banking services for the general public.