Banks Should Tread Cautiously With Facebook Graph

by Mercator Advisory Group 0

From American Banker:

A Facebook’s new search tool, Graph, could eventually be a treasure trove for banks.

The engine could be used to pair sales reps with prospects that have shared interests. Facebook’s Graph API could help a bank meet Know Your Customer requirements before opening an account (in combination with traditional data sources). The tool could help banks target new customers who are already friends of existing patrons.

“I think there is really strong potential,” says Frank Eliason (@FrankEliason), Citi’s global director of social media. But banks need to ease into use of Graph, so as not to offend.

Customers, he explains, have to feel their privacy is protected before a bank even thinks about using a new social media search technology.

Indeed, banks have been slow to even make use of Facebook’s social network platform. Most banks are using Facebook as a marketing tool, but few view it as a channel that could truly take advantage of the power of Graph.

Banks and other financial institutions should tread lightly, at least initially, with products such as Facebook Graph to minimize any reputational risk. There has already been much early publicity about the increased access of personal information with Graph’s natural language capabilities as it sifts through various big data databases and data warehouses.

As financial institutions are well-regarded for protecting personal data and limiting or excluding customer data sharing, any connection with products like Graph could have unintended consequences for their brand. It would likely be wise for financial institutions to take a wait-and-see approach to better gauge public sentiment about such search capabilities, and then determine the most appropriate approach moving forward.

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