The bank of Facebook – is social banking on the way?
Remember how we scoffed at those hapless souls who put their bank details up on Facebook when the social network first became popular? It now looks as though this was a misguided but ultimately accurate premonition of a future development in social media.
Whispers abound that Facebook is moving towards becoming the first social network to offer its customers banking services, and research and advisory company Gartner suggests that a social network, most likely Facebook, will rollout this service within the next two years.
Now that social media has embraced the power (and commercial benefits) of advertising, it is expanding into broader, and more overtly financial, services. You can already buy credit on Facebook and use it to watch films and play games, so adding to the customer experience. This has proved highly lucrative to the provider; credits cost 10 cents each but it was estimated by eMarketer that Facebook made $470m in revenue from this feature alone last year.
Social media approaches financial services at an advantage in the sense that the networks already know an incredible amount about their customers, and that information is being constantly updated. For instance, your bank probably doesn’t know that you just got engaged or are considering buying a flat, but Facebook does because you updated your profile and status to reflect these changes. Talk about relevant communications – these could be tailored to you in real time! Although any of you who find re-targeted online ads annoying won’t be impressed with this potential intrusion from Facebook.
From the customer’s perspective there are a lot of obvious benefits of getting multiple services from one provider, time saving being just one. However, I wonder how much a consumer would be willing to trust social media networks with their money. After all, these are websites set up primarily for virtual ‘social’ interaction between not only friends but also millions of strangers. Nonetheless, an expansion of the Facebook credits system that would allow me to buy products and services over and above the current offering through a pre-paid account, that I would be interested in because it would make my online life easier.
In the end it all comes down to trust and reputation. I trust my personal data to a company proven to be the best at using this data to do exactly what was promised, to connect me with my friends. I would need a lot more persuasion – and a bigger incentive – to give them any more information.
Adam Fairbrother is Business Director at Masius.