Facebook to Banks: Give Us Your Data, We’ll Give You Our Users
Facebook to Banks: Give Us Your Data, We’ll Give You Our
Users
Facebook has asked large U.S. banks to share detailed
financial information about customers as it seeks to boost user engagement
By Emily Glazer, Deepa Seetharaman and AnnaMaria
Andriotis Aug. 6, 2018 10:00 a.m. ET
Facebook Inc. wants your financial data.
The social media giant has 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.
Facebook increasingly wants to be a platform where people
buy and sell goods and services, besides connecting with friends. The company
over the past year asked JPMorgan Chase & Co., Wells Fargo & Co.,
Citigroup Inc. and U.S. Bancorp USB 0to discuss potential offerings it could
host for bank customers on Facebook Messenger, said people familiar with the
matter.
Facebook has talked about a feature that would show its
users their checking-account balances, the people said. It has also pitched
fraud alerts, some of the people said.
Data privacy is a sticking point in the banks’
conversations with Facebook, according to people familiar with the matter. The
talks are taking place as Facebook faces several investigations over its ties
to political analytics firm Cambridge Analytica, which accessed data on as many
87 million Facebook users without their consent.
One large U.S. bank pulled away from talks due to privacy
concerns, some of the people said.
Facebook has told banks that the additional customer
information could be used to offer services that might entice users to spend
more time on Messenger, a person familiar with the discussions said. The
company is trying to deepen user engagement: Investors shaved more than $120
billion from its market value in one day last month after it said its growth is
starting to slow.
Facebook said it wouldn’t use the bank data for
ad-targeting purposes or share it with third parties.
“We don’t use purchase data from banks or credit card
companies for ads,” said spokeswoman Elisabeth Diana. “We also don’t have
special relationships, partnerships, or contracts with banks or credit card
companies to use their customers’ purchase data for ads.”
Banks face pressure to build relationships with big
online platforms, which reach billions of users and drive a growing share of
commerce. They also are trying to reach more users digitally. Many struggle to
gain traction in mobile payments.
Yet banks are hesitant to hand too much control to
third-parties platforms such as Facebook. They prefer to keep customers on
their own websites and apps.
As part of the proposed deals, Facebook asked banks for
information about where its users are shopping with their debit and credit
cards outside of purchases they make using Facebook Messenger, the people said.
Messenger has some 1.3 billion monthly active users, Chief Operating Officer
Sheryl Sandberg said on the company’s second-quarter earnings call last month.
Alphabet Inc.’s Google and Amazon.com Inc. also have
asked banks to share data if they join with them, in order to provide basic
banking services on applications such as Google Assistant and Alexa, according
to people familiar with the conversations.
“Like many online companies, we routinely talk to
financial institutions about how we can improve people’s commerce experiences,
like enabling better customer service,” Ms. Diana said. “An essential part of
these efforts is keeping people’s information safe and secure.”
Facebook has taken a harder public line on privacy since
the Cambridge Analytica uproar. A product privacy team has launched new
features such as “clear history,” which allows users to prevent the service
from collecting their off-Facebook browsing details. It also is making efforts
to alert users to its privacy settings.
That hasn’t assuaged concerns about Facebook’s privacy
practices. Bank executives are worried about the breadth of information being
sought, even if it means not being available on certain platforms that their
customers use. It is unclear whether bank customers would need to opt-in to the
proposed Facebook services or what other privacy protections might be offered.
JPMorgan isn’t “sharing our customers’ off-platform
transaction data with these platforms, and have had to say no to some things as
a result,” said spokeswoman Trish Wexler.
Banks view mobile commerce as one of their biggest
opportunities, but are still running behind technology firms like PayPal
Holdings Inc. and Square Inc. Customers have moved slowly too; many Americans
still prefer using their cards, along with cash and checks.
In an effort to compete with PayPal’s Venmo, a group of
large banks last year connected their smartphone apps to money-transfer network
Zelle. Results are mixed so far: While usage has risen, many banks still aren’t
on the platform.
In recent years, Facebook has tried to transform
Messenger into a hub for customer service and commerce, in keeping with a
broader trend among mobile messaging services.
A partnership with American Express Co. allows Facebook
users to contact the card company’s representatives. Last year, Facebook struck
a deal with PayPal that allows users to send money through Messenger.
Mastercard Inc. cardholders can place online orders with certain merchants
through Messenger using the card company’s Masterpass digital wallet. (A
Mastercard spokesman said Facebook doesn’t see card information.)
—Douglas MacMillan and Laura Stevens contributed to this
article.
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