Facebook shares surged in the US Monday, as a Wall Street Journal report suggested the social media platform is approaching banks for details to help support its own plans to make messenger more useful with regards to users’ online banking needs.
However, a separate report in TechCrunch, says that the WSJ article isn’t completely correct in suggesting the tech giant wants to create a new financial services channel; Facebook already works with some large banks and offers some services through its Messenger app.
Facebook shares ended the US Monday trading session 4.45% higher at €185.69. The stock lost a little ground last week as its quarterly earnings report proved disappointing.
Facebook’s banking aspirations
The initial report on Facebook’s growing relationship with some large US banks appeared in the WSJ. The article states that CEO Mark Zuckerberg’s business has asked some US banks to share specific financial information about their customers.
Facebook would then use those details to help it design a new series of financial services for its existing users.
However, while this is true, it’s not the entire story, according to a separate report which states Facebook already offers some limited financial services to some users through its messenger app.
In addition, some of the large US banks it is already working with and in discussion with, approached Facebook - not the other way around.
“A recent Wall Street Journal story implies incorrectly that we are actively asking financial services companies for financial transaction data – this is not true,” Elisabeth Diana, a Facebook spokesperson told TechCrunch.
“Like many online companies with commerce businesses, we partner with banks and credit card companies to offer services like customer chat or account management. Account linking enables people to receive real-time updates in Facebook Messenger where people can keep track of their transaction data like account balances, receipts, and shipping updates,” she said.
Why are investors impressed?
Whatever the eventual outcome of the talks and potentially increased information sharing between the social media platform and the financial institutions, investors like this development as it suggests Facebook is looking to become more firmly integrated into its users’ lives.
If it can offer more key services – that are properly safeguarded – that users want and may even need, then its less likely that it will experience future declines in user numbers.