Social, Technology

Facebook is Asking Banks for Your Financial Information

In an effort to deepen user engagement on its site, social media giant Facebook (Nasdaq: FB) has requested several major U.S. banks to provide it with detailed financial information about their customers.

According to a story by The Wall Street Journal, Facebook wants to open relationships with banks such as J.P. Morgan Chase (NYSE: JPM), Citigroup (NYSE: C), Well Fargo (NYSE: WFC), and U.S. Bancorp (NYSE: USB). In exchange for an assortment of offerings to banking customers on its Messenger platform, Facebook would receive their financial information, including transaction details and account balances. Facebook says the information would not be used for ad-targeting purposes, nor would it be shared with third party institutions.

The development comes in the wake of Facebook’s disastrous second quarter earnings report, in which the company lost 19% in market cap in a single trading day. The massive loss in value took the entire tech industry down with it, with the Nasdaq slipping by nearly 4% in the matter of a few trading days.

With diminished growth forecasted in coming quarters, Facebook is eager to expand user engagement on its primary platform as well as find new revenue streams. Last week, the company announced that it would begin allowing companies to use WhatsApp for marketing and customer service purposes, charging between 0.5 cents and 0.9 cents per message. 

Facebook continues to deal with backlash from its data privacy issues, highlighted by the Cambridge Analytica scandal — in which data access was illegally granted for as many as 87 million accounts — as well as its role in allowing the proliferation of false stories to run on its site. 

Facebook shares responded favorably in response to the prospect of opening  relationships with banks, climbing 4.45% during trading action on Monday. The banks with whom Facebook is pursuing relationships each saw their shares climb higher as well.

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Patrick is a writer from Baltimore who covers finance, emerging technologies, startups, and culture. He previously worked as a managing editor at The Agora, one of the largest private publishing institutions in the world.

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