With the rise of Financial Technology (known as FinTech globally), Facebook’s attempt to try and explore the financial services business is very understandable and expected. Facebook is edging its way to partner with some of the largest banks, to work together, and potentially offer multiple options that would facilitate various sorts of customer transactions.
On one hand, the prospect of making all types of financial services more easily accessible to everyone is really welcomed, but on the other hand, data privacy would be considered the largest threat for Facebook to make that happen, especially after its recent Cambridge Analytica scandal during 2018.
Facebook taps into customer service
Following the recent global surge in ‘customer chats,’ which can be found on many different types of websites, whether for business related cross-border payments, or personal online applications such as e-visas, Facebook now wants to offer its own services, especially since Messenger now counts around 1.3 billion monthly active users.
Facebook already offers such services on Messenger with the likes of American Express, MasterCard, MoneyGram, and PayPal, but is now willing to partner with more traditional banks such as JPMorgan Chase, Citigroup, and Wells Fargo to name a few. The goal is of course to facilitate and make financial services very user-friendly to the general public.
This is very much in line with the global shifting from ‘retail’ to ‘online,’ since the recent trends of customer behavior suggest that it is more likely that the average customer would pick online services over retail, and therefore choose to opt out of having to physically go to the bank in this case to make any kind of transaction.
Payments in Messenger are already in the works
As of now, Facebook Messenger allows you to make peer-to-peer payments by sending and receiving payments. Users can add their credit or debit card info on Messenger and begin transactions right away. This is extremely helpful as money is transferred right away as soon as you click send, as most banks need 2-5 working days to initiate and send your requests.
This is only the beginning as Facebook now attempts to reach the wider world of banks and retail, mirroring other tech giants like Amazon and Google. At the end of the day, Facebook connects the whole world together, so attempting to connect banks with consumers could lead it to its road in FinTech.
It all comes down to data and privacy
On the flipside, data privacy will prove to be Facebook’s toughest challenge. This is because all banks permanently try their best to protect customer data and retain them.
In addition, the fact that Facebook encountered serious issues in user privacy and data security during 2018, could lead some banks and credit unions to consider large tech companies a threat to their companies and services.
In spite of all that, Facebook still has a lot of room and potential to cooperate with traditional banks and help them regain a competitive advantage in the process. Simultaneously, this will set to boost Messenger quite significantly as it will be the fundamental layer to enhance and improve a seamless banking and digital financing customer experience. Much like any business moving into FinTech, Facebook will attempt to follow those footsteps too.