‘Ironic that the world’s biggest social network is itself antisocial’
Three years ago the fintech community expected Facebook to launch a bank. Now it never will. Business is mostly about money, mostly about data, mostly about trust. Which of these statements would you most agree with?
There’s no denying business has gone through a seismic shift in the last two decades. Underlying this is the emergence of technologists as world sculpting business leaders.
Highly intelligent people who a generation earlier would have probably been academics instead built extraordinary businesses, using a new set of principles and totally new business models.
Whilst hugely profitable global companies today, Facebook and Google made no effort to generate revenue for years. They went for growth and market dominance with the understanding they would be able to make all the money in the world once they achieved it.
These companies are themselves technologies. Decisions within them are made according to mathematical formulae. Algorithms determine choices. The companies themselves are corporate machines, data driven and incredibly depersonalised. This is apparent at every level. These companies have gone to great lengths to create a distance between themselves and their users.
Even under such extenuating circumstances as the police needing a Facebook account password to help investigate the murder of a child, Facebook takes evasive action to avoid assisting. The closer a human being gets to them, the further they move away.
Facebook as an organisation is socially incompetent, hiding behind technology and processes rather than meeting anyone or anything face to face.
Ironic that the world’s biggest social network is itself antisocial and almost misanthropic. It treats people as data sources. The data is juiced out of them, to be sold and sold again. Never mind if it causes some of them to become addicted. Never mind if it is in fact a colossal waste of time for the users, never mind what the data is used for. It has only one function.
To make money. And this is why Facebook is in deep trouble. It lost sight of, or never actually considered, the human factor of trust.
It was always there, always assumed, and now it’s gone, and Facebook is a fraction of what it could have been as a result.
A few years ago in the fintech scene there was real expectation that Facebook would open a bank. It already had the customer base, and huge data regarding the relationships of users, the social demographic, their jobs and income, spending habits, interests, and desires.
Facebook could have been the challenger bank to rule them all. There was genuine expectancy that it would announce the launch of Facebook Financial Services and that would be the end of the line for the old school banks, and challenger banks, and all peer to peer lenders, payday loan companies, finance companies, all of it and everything.
Facebook was poised to take it all. It was obvious to everyone in the room.
They had everything they needed. Superior technology, seemingly unlimited resources, billions of dollars, billions of customers, and the trust of those customers.
The data they hold even
enables them to be an effective credit rating agency. They could have arranged loans between friends and topped up the difference.
They could have created big insurance pools between user networks and redefined the insurance sector.
For those of us who looked at Facebook as a financial services provider, it was clear and obvious they would move into the space and own it. They even have millions of business users, I mean, they had the Royal Flush, we were just waiting for them to lay the cards down and take the game.
In short, Facebook could have been the biggest bank, the biggest lender, pensions provider, insurer, loan facilitator, mortgage provider, and deliverer of every other financial product, including some they could create themselves.
How about enabling people to make micro loans to poor farmers in Asia? Or enabling mothers in Africa to set up little businesses supported by mothers in the UK? Anything. They could have done so much. Facebook is a fraction of what it could have been.
It’s trivial compared to the potential it had. They could have been truly wonderful. But what did they do? They saw only data, more and more data, and more and more ways to monetise it. Big data became huge data, and they lost sight of the most important thing.
Trust. Once you lose that, you’ve lost the game.
LOSING TRUST:Facebook as an organisation is socially incompetent, hiding behind technology and processes rather than meeting anyone or anything face to face.