Tuesday, August 7, 2018

Facebook wants your bank account - will you let them have it?

Here is one item making news from 538’s significant digits email this morning.

+4.45 percent on the day
Facebook stock, which was still hurting from the Cambridge Analytica data scandal and took a further historic nosedive in value last month, recovered somewhat on the news that the company had … asked large American banks to “share detailed financial information about their customers, including card transactions and checking-account balances.” Capitalism, boy, I dunno. [The Wall Street Journal]

That got my attention in a kind of WTF way. Why would Facebook’s stock valuation increase based on what looks like a risky proposition for account holders in America’s banks?

Here is the answer as provided by Judd Legum at popular.info.

Facebook data monster wants to eat your bank account info

Facebook isn’t satisfied with how much it knows about you; now it’s after your bank balance.

“The social-media giant has asked large U.S. banks to share detailed financial information about their customers, including card transactions and checking-account balances, as part of an effort to offer new services to users,” the Wall Street Journal reports.

The news comes after the revelation that Cambridge Analytica, the controversial data firm that worked with the Trump campaign, accessed “87 million Facebook users without their consent.”

At least one bank “pulled away from talks due to privacy concerns.”

Facebook’s story

Facebook says it is going to use the bank data to power chatbots, not advertising. According to the company, linking your bank account data with Facebook would allow you to use Facebook Messenger to check your balance. A Facebook spokeswoman described the program as “completely opt-in.”

Why Facebook’s stock price went up

To ordinary people, the Wall Street Journal report seemed like an exposé of shady business practices.

Investors, however, celebrated the report. Facebook’s stock, which had been slumping, surged over 4%.

It’s important to understand why. Facebook is in the business of collecting as much data about you as possible and then turning that data into cash. If it comes up with an idea to get more information about its users, that makes it a better company.

Maybe Facebook wouldn’t initially allow advertisers to target users based on this information, but Facebook will figure out a way to make money from the new program. Investors understand this and drove the stock price up.

It comes down to trust

Linking your banking account to Facebook could theoretically be innocuous. But to believe that, you have to trust the company to both protect the data and not use it beyond the initial stated purpose.

Facebook’s recent conduct has not engendered trust. That’s why many people online are reacting poorly to the idea.

Scriber is one of those. As Mike Wallace used to say, “Oh, come on.” Would you hand over your financial information to Facebook? Really? Instead, why not hand it over to a Russian troll farm. Your call.

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