Facebook has been getting cozy with your banks, but that might not be as alarming as it sounds.
On Monday, the Wall Street Journal reported that Facebook has been courting banks to enter into data-sharing agreements. Google and Amazon have reportedly also sought similar arrangements, exchanging user data for the banks’ integration with the tech companies’ massive platforms.
But Facebook is denying the “data sharing” aspect of the report, per an article from TechCrunch. It says that it is seeking integration with banks to enhance its payment and commerce initiatives within Messenger — which already launched in March as a pilot program with Citibank in Singapore.
But Facebook says that it is not actually seeking to collect information, from a data perspective, nor does it want users’ shopping history.
Facebook representative Elisabeth Diana explains:
A recent Wall Street Journal story implies incorrectly that we are actively asking financial services companies for financial transaction data – this is not true. Like many online companies with commerce businesses, we partner with banks and credit card companies to offer services like customer chat or account management. Account linking enables people to receive real-time updates in Facebook Messenger where people can keep track of their transaction data like account balances, receipts, and shipping updates” Diana told TechCrunch. “The idea is that messaging with a bank can be better than waiting on hold over the phone – and it’s completely opt-in. We’re not using this information beyond enabling these types of experiences – not for advertising or anything else. A critical part of these partnerships is keeping people’s information safe and secure.
Facebook also stressed to TechCrunch that this is something the banks are seeking from Facebook, not just the other way around.
Facebook’s take on the WSJ report is not an outright denial, but it’s close. Facebook is acknowledging that it is working with banks to increase its chatbot capabilities. But it denies the idea that it is seeking access to your financial data so it could fuel its ad engine or for some other purpose.
What that means is that if you’re worried about Facebook having any connection with banks, the WSJ’s report should alarm you. You might rightly question why the behemoth that is Facebook should grow to encompass any more personal information about anyone, let alone information as sensitive as bank accounts.
But Facebook is saying it won’t collect any of your bank’s financial or transactional information about you, and that opting into the service will only enable better integration with Facebook Messenger. So this might not be such a big deal.
The Wall Street Journal originally reported that over the last year, Facebook had been asking banks to share financial information on customers, including spending habits and bank account balances, as a way to better integrate commerce into Facebook, and specifically Messenger. The banks Facebook reportedly approached in the last year include JPMorgan Chase, Wells Fargo & Co., Citigroup, and U.S. Bancorp.
What would the banks get out of this arrangement? Facebook reportedly attempted to entice banks with the proposition that it would help cement banks’ reach in online payments and commerce. That’s a space in which banks are playing catch-up behind PayPal, PayPal-owned Venmo, and Square. The banks could gain an edge over their digital native competitors by using Facebook’s architecture to communicate with customers, facilitate money transfers, and more.
The biggest issue for banks was reportedly privacy. The WSJ reported that the banks were concerned about joining with companies embroiled in data scandals such as Cambridge Analytica — although, historically, financial institutions are the ones who have suffered actual data breaches, not Facebook.
Commerce integration with Messenger specifically is a priority for Facebook. People can already send money through Messenger, and an expanded partnership with the banks like the Singapore-Citibank pilot could make that capability more robust.
Facebook also recently touted the growth of Messenger bots for business, which allow for automated customer service and more. Plus, last week, Facebook announced that it was ramping up its business offerings for WhatsApp. With more than one billion daily active users, WhatsApp has the potential to make Facebook a ton of cash, if it can harness it as a tool for enterprise, customer service, and, perhaps, banking.
Despite the Citibank partnership, it looks like the banks aren’t rushing into these deals — mainly thanks to all the bad PR Facebook, and even Google and Amazon, have garnered around privacy and the already gargantuan amount of data the companies collect on their users.
Facebook has been caught playing fast and loose with its users’ data before, an attitude that it is now earnestly trying to reverse. But in this case, the word “banks” in association with “Facebook” might just sound scarier than the reality.