According to a new Wall Street Journal (WSJ) report, Facebook has asked U.S. banks to share detailed information on their customers, including data on credit card transactions and checking account balances. However, the banks seem to be approaching any partnerships very carefully after the recent Cambridge Analytica privacy scandal, and one large bank has reportedly already quit talks with Facebook.
Facebook Wants Your Banking Data
According to WSJ, Facebook doesn’t want to just be a platform where you can communicate with your friends, but also a place to buy and sell goods and services. Facebook tried to persuade banks to give it their users’ data by promising them features such as users being able to see their checking account balances or receiving fraud alerts within Facebook Messenger.
The banks’ primary concern with this partnership is, unsurprisingly, about data privacy. In order for Facebook to show users’ banking information, Facebook would need to have access to that same data too, which it could then use to improve its ad-targeting algorithms. Furthermore, it could share that information with third parties, just as it has done with other user information in the past and as it did to cause the Cambridge Analytica scandal.
Facebook has reportedly said that it wouldn’t use the data to improve its ad-targeting or share it with others. However, one large bank has already pulled out of the partnership talks due to these privacy concerns, according to the WSJ. But after the Cambridge Analytica scandal and multiple other privacy scandals, even Facebook’s current partners may not be willing to trust the company.
According to WSJ, Alphabet (Google’s parent company) and Amazon have also been in talks with the banks about sharing their customers data to use it to improve digital assistants, such as Google Assistant and Alexa, respectively.
A Lack of Trust
Banks would like to have better integration with online platforms, but at the same time they would like their customers to use their own apps and services, rather than the services of third parties like Amazon, Google and Facebook.
A JPMorgan spokesperson said that the company is not sharing its customers’ transaction details with these third parties. Unless Facebook is able to reassure the banks that it either won’t have direct access to the data itself, or that the data will never be used for advertising purposes, then the company may not succeed in convincing U.S. banks to share their customers data.
As Amazon, Google and Facebook are discussing with banks how to best share their customers’ data with each other, Congress is preparing GDPR-like legislation that requires user consent before data is transferred from one company to another. All of these discussions may remain moot if such a bill passes.