How Facebook destroyed digital banking

Stand up and ask your Alexa who is in your family right now. Or who lives here. Or who all she’s interacted with. Who all is she talking to! She doesn’t know. Isn’t that outrageous? Why hasn’t she asked? Why does Netflix insist on the different profiles of those using in it the same subscription, but Alexa, a device designed to sit in the middle of the family hub has no clue? She’s being discreet is why. She’s careful what personal data she asks about. That’s not right.

Is this likely to change with the recent Facebook perceived data breach issue? Unlikely. Sadly that is moving us all, GAFA and banks alike even further away from honest, useful, data usage that empowers people’s life.

Let me be clear. Harvesting people’s data against their will to expose themselves and their friends to unwanted content is undoubtedly unpleasant/wrong/questionable/abominable (insert as per your own moral compass). Asking your online and mobile users if it’s ok to analyse their data in a way that will create value and help them save their coins is neither of those things – it is the decent thing to do.

One is stealing, the other, is the thing banks and credit unions had a moral duty to have delivered eons ago and haven’t. The fact that this breach will further blur the difference between data used for the evil and data used for the good with the consent of the user, is a tragedy.

It won’t be an evident, straight-away clear tragedy either. Banks won’t rush to put out press releases to guarantee data privacy and declare they did away with their Chief Data Officers and their analytics mandate because they never announced those in the first place.

With few and far between exceptions –mainly European- where there has been some furore over an incident or other that warranted messaging management and forced banks to show their hand about being in or out of the data game, the vast majority of banks are fanatical about this false sense of privacy protection. The one that mandates they can look at no data without breaching consumer trust as people demand data security alongside funds security at all costs and above all convenience.

This is wrong. One of the many unexamined myths of banking. There were no extensive surveys to have told retail banks their customers don’t want them to analyse their transactional data. There were no A/B tests to show they hated being asked for permission. No groups were sat in front of pleasing user experience alternatives that would have enhanced their lives and put more money in their pockets and they simply checked the box saying “neah, I don’t want any better of an experience and any more of money, I want you not to ever know what my transactions are about”.

One of the reasons this exploration hasn’t happened is that banks know on some level what the answers to that would be. What the demand would be. What the account holder would choose faced with a realistic choice. And they can’t deliver on it.

It is now, sadly, the best-kept secret of the industry that banks have little –if any- analytics capability and the reason why they are not using data are not artificially moral but largely motivated by the lack of implemented technology. In other words they are not aiming to protect our data despite how they could decipher it and use it to our advantage, they simply haven’t deciphered it or worked out how to use it to our advantage.

But they were on their way to doing so. Of all the banks I’ve worked with over the past 10 years, I can’t think of any that doesn’t have a serious effort under way to figure out how to get analytics basics in place -starting with categorization and solid aggregation- and how to translate them into the customer proposition. Finally. At long last. And now this happened and I am willing to bet the ICO-ed farm they will stop. Or at a very minimum slow down and become overly cautious and excuse the many internal reasons justifying and excusing the lack of action over the last 8-10 years.

Thanks a lot Facebook. I need banking that gives me MoneyMoments ™ instead of Financial Products a lot more than I need likes on my posts, now I may have neither.



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