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Facebook Looking to Partner with Banks and Financial Companies

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A better customer experience is what all businesses are striving for today. In the race to meet and exceed customer expectations, businesses are implementing the best technological innovations. Digitization in the financial industry continues to accelerate, with bulk document scanning and document conversion on a large scale. Transforming bank data into digital format helps banks improve efficiency and workflow. Large organizations that invest in digital transformation focus on digitizing their processes for new and existing products and services; enhancing digital security; and reimagining the customer journey, according to Efma’s 9th annual Innovation in Retail Banking report of 2017 that studied 250 financial institutions (large and small) worldwide. This trend is in keeping with customer expectations and enabling customers to benefit from innovative new services. Once the financial sector is fully automated the consumers could be encouraged to share their financial data in controlled ways as it will ensure better and improved services. Data sharing is expected to unleash a new competitive dynamic within the payment industry. Technology providers and digital banking will transform customer experience for the better.

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Facebook Wants Banking Data

In the month of August 2018, Facebook announced that it had a proposal to form data sharing with investment banks and credit card companies. According to the Wall Street Journal (WSJ), the social media giant has asked large US banks to share detailed information about their customers, including card transactions and checking account balances, as an effort to offer new services to users. Banks like Wells Fargo, Citigroup, JPMorgan Chase and US Bancorp were approached by Facebook to access personal financial data such as account information via Facebook’s messaging service, Facebook Messenger instead of contacting that bank or customer service representative or automated chatbox. Facebook wants banks to use Messenger to provide a seamless customer service. Facebook is already working with a few banks for better banking convenience. For example, Citibank customers in Singapore can communicate with their bank’s Messenger chatbots to check balance, report fraud activities, receive assistance etc. Messenger is used as a catalyst for easier communication between the consumer and the bank.

Although Facebook’s initiative is to provide optimum banking service to customers, its recent controversies surrounding the involvement with Cambridge Analytica does not assure that any future data collected will be used solely for benign purposes. Privacy concerns are making banks hesitate to take up the proposal.

However, Facebook guarantees that any financial data or transaction details will not be shared with external markets or advertisers. Facebook’s spokeswoman Elisabeth Diana said that messaging with banks can be better than waiting on hold over phone. The question is whether Facebook will be able to deliver what they intend to provide without creating any problem or damages. This new approach could improve banking efficiency on a large scale, because around 1.3 billion people are using Messenger each month. But will the data transferred remain safe? That is the big question.

Elisabeth Diana said to TechCrunch that the WSJ’s implication that Facebook is actively asking financial service companies for financial transaction data is not true. She pointed out that some banks and credit companies themselves approached Facebook to form a partnership. Leading financial institutions’ spokespersons assure that safeguarding the security and privacy of customer data are paramount to whatever they do.

A Reuters poll recently found that 51 percent of consumers do not trust Facebook and Facebook users’ confidence in the company has decreased by 66 percent following the Cambridge Analytica fiasco. Only 28 percent users believe that the company is committed to privacy.

Security Should Be Given Top Priority When Sharing Data

Data sharing done right could bring benefits to businesses and consumers. However, it is to be done with great care and caution to avoid harmful data breaches. Digital security has to be a top priority for banks and other financial institutions planning to share data with external entities with a view to improve customer experience. Security should be a major concern even when outsourcing data entry or using some other outsourced solutions. There is no doubt that to remain relevant, financial organizations including banks must invest wisely in their long-term digital future. Studies show that around 73% of institutions plan to invest in reliable technologies including secure, private, and encrypted chat or communication apps to minimize security threats and data breaches.

About Rajeev R

Rajeev R

Manages the day-to-day operations of MOS from NY. With an interest in information technology, Rajeev has guided MOS to extensive use of digital technology and the internet that benefits MOS as well as MOS clients.