Your Thoughts: Facebook & Your Banking Data
Forbes is warning to ‘quit Facebook before it inevitably accesses your banking data’ following reports from the Wall Street Journal alleging that Facebook has spent the last year in touch with banks such as JPMorgan & Wells Fargo in pursuit of its users’ banking data. As a result, investors bled the social media giant of…
Forbes is warning to ‘quit Facebook before it inevitably accesses your banking data’ following reports from the Wall Street Journal alleging that Facebook has spent the last year in touch with banks such as JPMorgan & Wells Fargo in pursuit of its users’ banking data.
As a result, investors bled the social media giant of $120 billion. Banks haven’t budged and it’s unknown whether banks in Europe are also being asked to partner with Facebook. Other reports also indicate both Amazon and Google have also in the past pursued relationships with their users’ banks, for the end purpose of gathering banking data.
This week Lawyer Monthly hears from two top experts in the field who provide their thoughts on the dubious circumstances of these reports and the future fragility of consumer data and security.
Dan Goldstein, President, Page 1 Solutions, LLC:
The timing of the news that Facebook has been asking banks to share their customers’ financial data with on its Messenger platform is troubling coming so close on the heels of the Cambridge Analytica scandal as well as the subsequent privacy issues for Facebook.
While Facebook has started to make some changes to prevent malicious actors from using its platform to influence voters and access confidential information, the idea that it would ask banks to give it access to customers’ private financial records makes you wonder if Facebook really understands the significance of the issue.
Not only is Facebook’s apparent tone deafness to privacy issues a PR nightmare, it may result in legal liability as well.
At a minimum, Facebook should take a step back and make sure that it has fully addressed the problem of data privacy and data security before asking financial institutions, let alone consumers, to trust it with private customer account records.
Looking beyond Facebook in this matter, any bank that agrees to this data sharing arrangement is begging for a major PR problem, something Wells Fargo and other major banks already have to address.
Beyond the PR issues, Facebook’s lack of interest in protecting its users’ privacy (to say nothing of bank customers’ privacy) may well land it in legal hot water. The European Union’s GDPR regulations and the California Consumer Privacy Act (which will be enforceable in 2020), both pose the risk of state regulatory action. Beyond that, the likelihood of a spate of civil lawsuits from consumers who have had their private data accessed by malicious actors is almost certain unless Facebook actively and publicly takes clear steps to protect user privacy.
Adam Levin, Founder, CyberScout:
Facebook tried to partner with Netflix to share user video streaming choices as well as recently watched shows with friends in direct violation of a little-known privacy regulation called the Video Privacy Protection Act of 1988 (VPPA). Partnering with other industries without doing their homework regarding the regulatory consequences is reckless, and also, sadly, typical of Facebook.
Banks are not sufficiently mobile smart phone app based. By 2022, millenninials will make up 44% of the labour market , they are app users. Nearly a quarter of millenninials cite a lack of a mobile app as the main barrier to bank engagement  and that they are three times more likely to open a new account with their phone than in person  and suddenly the opportunity for Facebook with its integrated communication properties like Messenger and WhatsApp should be apparent.
This may represent Facebook’s approach to capturing a share of the mobile pay market in a “device agnostic” way with no need of Apple or Google pay systems. They have the advantage of being already built in to what users are doing on their phone rather than a separate app. While Messenger has enabled digital payments since 2015, it is still limited to: (a) a few geographies like the US, UK & France (b) debit cards only (c) peer to peer payments (no payment to businesses).
Why wouldn’t Facebook want to move into different verticals like financial services? But consumer privacy and security should not be collateral damage.
If you would like to voice Your Thoughts on this matter, feel free to do so in the comment box below and let us know what you think!