Facebook Wants Your Banking Information, Too
After a litany of privacy scandals, Facebook is pursuing customer information from banks.
PHOTO CREDIT: Getty Images
After an historic wipeout, Facebook stock was up 2.5 percent Monday on news first reported by the Wall Street Journal that the company is looking into ways to incorporate users' financial information into its platform through partnerships with financial companies.
The initial story, that users' banking data was going to be integrated into Facebook caused an immediate uproar both on- and offline. Facebook quickly clarified that the new feature is (for now anyway) only going to be used by the company's Messenger app to "increase user engagement." The data is necessary for a somewhat hard to understand reason (they want credit card and debit card transaction data, checking account balances, etc). One thing that's hard to miss, the now-familiar brand of caginess on the part of the social media company. Messenger currently has 1.3 billion users. (Messenger is a stand-alone app owned by Facebook that has been no stranger to privacy controversies of its own.)
If corporations are people (see Citizens United v Federal Election Commission), then Facebook could well be a member of the Trump family.
There was the story about Facebook sharing data with Huawei, a Chinese mobile phone manufacturer designated a national security risk by the U.S. government as well as other mobile phone manufacturers of Apple, Samsung, and Blackberry devices. Then there was the flap caused by the company creating updates to encourage users to comply with non GDPR-friendly terms of service. And of course, no shortlist would be complete without the Cambridge Analytica mess, which may have contributed to the outcome of our last presidential election.
Facebook is soft-pedaling this latest move, and it would be entirely understandable were one to wonder if they're out of their minds over there. Yet somehow, the stock market said anything but "Too soon" in reaction to the story. As a matter of fact, investors seemed relieved to see that Facebook was doubling down on its full spectrum assault on consumer privacy.
Facebook's spokespeople have said that online companies routinely communicate with financial institutions about essentially improving their users' lives--in this instance, by allowing banks and other entities to have a new and improved way of interacting with their customers. Facebook's pitch is simple: Messenger offers financial institutions a familiar and secure way to communicate with their customers. The company claims that it does not use any granular information provided by the banks.
In a perfect world where people always tell the truth, all would be well. There would be no risk of having our every transaction, our bank balances, our mortgage or rent payments, our utility bills, our favored vendors perused by whomever wanted to pay to have a look. That's not the world we live in.
The privacy issues to which such an arrangement gives rise should be clear enough, but in these wild west days of the surveillance economy, that's sadly not the case.
Banks have historically avoided this kind of arrangement, but not only for privacy reasons. Often the primary reason is to keep customers on their sites where they are exposed to in-house marketing and promotions. That's where Facebook correctly saw an opportunity.
The social media giant can offer a better environment for banks and other financial organizations to accomplish the same goals. Messenger already has a huge number of users, and unlike a personal investment or bank app and/or site where the biggest whizbang is often a free FICO credit score, Messenger can rightfully claim being one of the stickiest apps out there. People spend time there. Expand the universe of what users can do on the app (pay bills, apply for financial tools and services, send money to friends and family), and it's a win-win situation for both financial service companies and Facebook.
While this move purports to create greater convenience and opportunity in the realm of personal finance transactions for users, it comes at a sensitive time for Facebook. For sure, if implemented the move would represent yet another (potentially) problematic privacy grab by the company. But more importantly, it is almost certainly not in the user's best interest. After all, Facebook doesn't have a stellar track record when it comes to privacy.
We live in a world increasingly influenced by what must now be called the surveillance economy. It is an environment that favors corporations over people--and specifically it favors the exploitation of a consumer's personal information over his or her right to privacy. In a country with little effective consumer advocacy to check the egregious over-reaches of big data, one has to be exceedingly careful. There is no danger in calling "Wolf" here, because the data-devouring wolves are everywhere.
BY Entrepreneurs Organization