According to a report Monday in the Wall Street Journal, the social media giant wants banks to share sensitive customer information and in return, Facebook will use that data to develop features in its chat platform to offer those same bank customers the ability to check account balances or receive fraud alerts. Wells Fargo, JPMorgan Chase, Citigroup, and U.S. Bancorp were all reportedly approached.
But there's a big problem — those banks, and most others, already provide such abilities to their customers. While the pitch is supposed to be enticing, bank executives say they see little benefit to it, particularly when compared to the potential drawbacks, including heightened data privacy and regulatory scrutiny concerns.
Additionally, while Facebook is promising bankers that it won't use any financial data for ads or share it with third parties, that is unlikely to pass muster with compliance officers, executives, and regulators. Ongoing trust issues and competitive concerns regarding data sharing between banks and fintechs makes the offer particularly unattractive. Many bankers see themselves in a fight for the future over who customers will trust with their financial data. They fear players like Facebook, not to mention Google, Amazon, and Apple, will eventually usurp banks' role.