While much of the world is pushing forward with empowering users to control their own financial information, social media leader Facebook (NASDAQ:FB) is heading in the opposite direction by asking banks to share detailed financial information about their customers. This deeply concerning report was first revealed by WSJ.com that states;
“[Facebook] has asked large US banks to share detailed financial information about their customers, including card transactions and checking account balances, as part of an effort to offer new services to users.”
Facebook inevitably wants to dig deeper into users personal lives by enabling online purchases and perhaps providing financial services.
In a statement to CNBC, a Facebook spokesperson shared some additional color on the report;
“Like many online companies, we routinely talk to financial institutions about how we can improve people’s commerce experiences, like enabling better customer service. An essential part of these efforts is keeping people’s information safe and secure. We don’t use purchase data from banks or credit card companies for ads.”
Dan Goldstein, owner of digital marketing firm Page 1 Solutions, called the move by Facebook concerning;
“This is very troubling. It appears that Facebook has not learned its lesson about the importance of user privacy. The banks may be tempted to make this trade, but it will be bad PR, not to mention violations of financial privacy rules, for any who do. This may indicate that it is time for the state and federal regulators to step in and regulate how Facebook manages private user data.”
The World Turns Right, Facebook Turns Left
In the UK, and elsewhere, there is a push to have consumers control all of their own data. Open Banking laws in the UK have turned the tables on banks and other financial services where they can no longer monetize the data that is not theirs. This has been standard operating procedure for banks in the US for many years and is something policymakers may be compelled to address.
Imran Gulamhuseinwala, OBE and Trustee of the OBIE – the group that is leading the Open Banking charge in the UK, stated last year;
“Consumers’ financial data belongs to consumers, not to the bank. If consumers want to give access to their data to third parties, they have the right to do so.”
Additionally, new blockchain based services may have the potential to improve user control of their personal information. While Facebook may see a near term opportunity, in the long wrong, Facebooks goal of controlling more user data and not less may end up harming the social media firm.