Considering that every new feature on Facebook inevitably leads to a (frequently justified) user freakout over privacy and ownership of information in the digital age, it’s somewhat surprising that the website is looking to integrate with online banks. What could be more private than your bank account balance — that number that we’re always sure to crumple up into a tiny little ball before putting it in the ATM vestibule trashcan? Well maybe that’s exactly why Facebook wants in. That is some valuable data. According to Fortune, Facebook is planning an integration with an Australian bank.
Commonwealth Bank, headquartered in Sydney, is reportedly in internal beta with the Facebook application. From Fortune:
[The application] will allow Facebook users who are bank customers to make payments to third parties as well as Facebook friends through the social media channel, according to the bank. Commonwealth will secure transactions with its own authentication system — similar to how payments are secured on its online and mobile banking site.
Banks hope to both better engage with their customers and provide new channels for transactions — like the peer-to-peer payments mentioned above.
Naturally, the most pressing concern is one of security. Hardly a week goes by without a social network’s passwords being compromised. Last week it was Yahoo!; shortly before it was LinkedIn. Facebook has yet to suffer a security breach of that magnitude, but it does have a healthy community of spammy apps. And, it wasn’t long ago that an old college friend contacted me via chat, begging me to wire him money to London, where he claimed he had been robbed. I asked him what major we shared, and he quickly disappeared. But what if it were seamless for me to send money to the impostor through Facebook — would this scam be easier?
Time is money
This exact scenario is sort of a concern for Commonwealth Bank, according to the story: “Commonwealth Bank says it won’t launch the app unless it can offer customers a 100% guarantee of security…Plus scams like these are inherent to any virtual medium today, and unlikely to deter the Facebook user who finds banking from the social channel a time saver.”
And there’s the rub: it’s impossible to root scammers out of social media, so why bother? Commonwealth Bank will pay the concern lip service, but if it wants to put its online banking capabilities on Facebook, it’s going to so long as things are tidy on its end. The story sums up this ethos, right or wrong, quite succinctly: “Sure, people are coming to Facebook to share their vacation photos with pals. But why not collect their paycheck, buy medical insurance or pay the IRS there as well?”
This would be a dream come true for Facebook: that it becomes the portal for literally all money spent online, a website that connects its users to literally everything else they want to see on the web. And while banking over Facebook with Commonwealth Bank will be private — i.e., it won’t update your status to let your friends know that you’ve transferred $100 to savings, or whatever — but Fortune doesn’t say one way or another whether Facebook will see what happens in your bank account.
If we had to venture a guess, we’d say that Facebook would very much like to see what’s going on in your bank account. It would give it a new revenue stream, selling highly-targeted ads for CDs and checking accounts, like personal-finance management software does. And if Facebook can see how and where your money gets spent — by pulling your debit card information, like Mint does — it can better target its own low-performing ads for consumer goods.
Facebook’s entire proposition to advertisers is that it can get to know what people want to buy by letting them tell their friends what they like, and can therefore better target ads than other online outlets. Currently, Facebook’s ads don’t perform very well, but with your bank account attached to your Facebook, they may perform substantially better.
Or, maybe Facebook would be happy to host an expensive-to-develop banking app without getting a look at your finances and spending habits, especially now that it’s a publicly-traded company with shareholders to appease. Somehow we doubt it: most conveniences come with a price.
On the other hand, convenient is convenient and ads are ads. We see them all the time. Google reads your gmail and uses keywords to target ads, and you don’t think twice about it. Would this be at all different?