The Facebook Banking Question: Will FinServ Protect Data or Go for Personalization?
The Facebook banking question is all about what relationship financial services marketers want to preserve with consumers: That of data protection or personalized, timely marketing? Is it more important to offer relevant services when a consumer announces an engagement on social media, or to keep a 1:1 relationship where that customer trusts that data is protected?
The question arises because on Aug. 6, The Wall Street Journal reported Facebook wanted to partner with banks to gain customer data and give the banks data on the social network's users. By Aug. 13, Ben Walsh of Barron’s was already calling that a bad idea.
In addition to consumers not wanting to see fraud alerts in Facebook Messenger, he says, banks will lose the 1:1 customer relationship in a manner similar to how publishers lost that when they partnered with Facebook, Walsh says. Plus, Facebook has the aura of bad data steward after the Cambridge Analytica brouhaha and a low level of consumer trust following its fake news debacle, he says.
Facebook says investing in a data privacy infrastructure following the scandals is part of why its earnings didn't match Wall Street's projections and cast its stock as well as the stocks in the tech sector into a downward slope following its Q2 earnings call.
Walsh continues, alluding to Facebook's move into healthcare marketing and more:
"There are lots of moments — lobbying, directly copying a competitor’s product, etc. — where Facebook is doing what big companies do, flexing muscles to enter new markets. The quest for financial data is just its latest power play.
"So far, it looks like banks aren’t taking the bait, even if Facebook shareholders are hoping that they will. Facebook shares were up 4.5% on the news."
Data Privacy in a Facebook Banking Era
Walsh says Facebook's asked large U.S. 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,”
He adds The Wall Street Journal’s Emily Glazer, Deepa Seetharaman and AnnaMaria Andriotis also reported this week "that Facebook has had conversations with many of the nation’s top banks, including JPMorgan Chase, Wells Fargo and Citigroup."
[Author's note: If banks are concerned about public trust, Wells Fargo, for one, has a lot of ground to regain after its recent scandal and the others may not want to get involved, either, considering the trust the financial services sector had to rebuild following the Great Recession.]
Walsh notes that Facebook is pushing to use its Messenger platform for this effort, which may not be surprising due to the social network's leaders saying the main application's News Feed is saturated with ads. Despite that, a Facebook Newsroom post yesterday proudly proclaimed that the social network's users themselves raised $300 million in birthday fundraisers during the year. Those fundraising appeals show up in the News Feed. But it does show users trust Facebook with that data.
Then there's the fact that advertisers are already in Messenger, too:
FB Messenger is more popular than FB, because customers want to have a real, 1:1 conversation, immediate assistance and resolution of issues @LilyHarder of @mintelnews is telling us now! #AADM18 @TargetMktg https://t.co/NIZkfnwdRm
— (((HeatherFletcher))) (@HeatherReporter) June 28, 2018
Trigger Marketing in a Facebook Banking Era
Back to that consumer announcing an engagement to her family and friends on Facebook. Does she want to hear "congratulations" and "here's how you can buy a house" immediately from her bank? If history is any guide to these sentiments, probably not. (Just ask the gentleman whose proposal got usurped by Overstock.com announcing he bought a ring.)
Kelechi Okeke writes yesterday on CustomerThink.com that banks currently use social media to market products, and engage with customers and provide them with support.
"Very few banks are keen on taking things a step further by offering transactional banking services on these platforms."
Okeke provides insight, though, on how financial services marketers could benefit from partnering with Facebook. In addition to enhanced trigger marketing opportunities, they could gain customers beyond their regions, acquire younger customers because they're on social media, and deepen customer support opportunities by, for instance, allowing them to use Facebook logins on the bank's apps.
What do you think, marketers?
Please respond in the comments section below.
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