As Brett King builds his online banking storefront, Movenbank, the bank critic and author of BANK 2.0 is facing some criticism himself over his plans to use Facebook in the account opening process.
Similar to Simple (formerly BankSimple), Movenbank, which is due to launch next year, will not actually be a bank. It will control the front end of the customer relationship, and will store deposits with a chartered bank or banks, which King would not identify because the agreements were not finalized. “We looked at getting a charter and found it would be so unwieldy to apply for a charter ourselves, with no guarantee that we would succeed within our timeline,” King says.
Like Simple, King is positioning his venture as an alternative to traditional banks, with the underlying contention being that old school banks aren’t responding to the digital age fast enough. “I guess that we see [Simple] as partners in crime,” King says. “We are creating a new category of banking, the Amazon vs. traditional bookstore idea.”
New clients will use Facebook for registration and logging into movenbank.com in a process called “social sign in.” The idea is to let users avoid entering multiple pages of personal information, instead using a web profile to log in with a single click.
But Facebook has come under fire recently for its privacy policies. That’s placing the startup on the hot seat to explain how the privacy issues regarding social media in general are not a specific concern for users of Movenbank.
In an interview in which he explained the startup’s privacy protocols and overall strategy, King says the concept of privacy is being changed by social media, and that his new financial services venture is using Facebook in a manner that gives consumers control over what is shared and how.
King says that since people have already given Facebook much of their personal information, it’s easier for the consumer to not have to re-enter that information elsewhere. Movenbank uses that information to build a relationship with the consumer and to construct what it calls a “financial personality,” that can help it provide actionable insights and guidance for consumers to improve their financial behavior.
Movenbank plans to collect Facebook information that users mark “public,” including first and last name, location and profile picture. Information on “friends” is included if the consumer opts in, and the consumer’s personality is not displayed unless the consumer enables sharing. The firm says it does not share data with external parties and does not send marketing messages to the consumer’s email address or the addresses of the users’ friends. King says the startup has its own website and data storage facilities that are separate from Facebook.
At least some of the responsibility of privacy protection will reside with users, who will get instruction from Movenbank, but will still have to understand the public vs. private uses of social networking sites.
“You will have to mange two parts of how you live,” King says. “One will be a very secure identity in which important information like financial data is protected, and the other will be your public digital persona…Social media isn’t going away. The notion of privacy is changing. People put photos on flickr and Facebook, but would be horrified if someone came into their homes and looked through their actual photos without asking.”
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