Banking's future is Facebook? Really?

Banking's future is Facebook? Really?

Summary: Commonwealth Bank of Australia explains why it's treading the Facebook banking path.

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When Commonwealth Bank announced its intention to develop a banking app for Facebook, what was it thinking?

Putting the bank into Facebook, in the form of its Kaching payments app, certainly puts the bank in front of its customers, but it also represents a significant change to the bank's online security message.

It's no longer a matter of users checking the URL to make sure it's the bank's, and checking that the web browser displays the padlock icon that indicates an SSL-encryted connection. Anyone can sign up to be a Facebook app developer, and it's difficult for a non-technical user to see exactly where the different components of a Facebook page are being delivered from.

On this week's Patch Monday podcast, CommBank's general manager of online banking Drew Unsworth explained the reasoning behind the move to Facebook, and why the bank is so confident it's not creating security problems.

In part, the answer is about better data mining, exactly the kind of thing RSA executive chairman Art Coviello told us about in March. And this has been enabled by CommBanks billion-dollar real-time core banking system, something the other major banks have had trouble creating.

Unsworth also explained why the bank launched the Kaching for Android app, without a near field communication (NFC) system for contactless payments.

To put CommBank's banking strategy into a global context, we're also joined by Charis Palmer, editor of Online Banking Review.

Anyone can create a non-bank financial service using a licensed bank as back-end provider. Think of Virgin Money, Palmer said.

One possible threat facing banks is their retail operations being decimated by a phalanx of new competitors, leaving them to run the wholesale operations. It's a business structure much like the telecommunications companies.

To leave an audio comment on the program, Skype to stilgherrian, or phone Sydney +61 2 8011 3733.

Running time: 29 minutes, 28 seconds.

Topics: Security, Banking, Social Enterprise

About

Stilgherrian is a freelance journalist, commentator and podcaster interested in big-picture internet issues, especially security, cybercrime and hoovering up bulldust.

He studied computing science and linguistics before a wide-ranging media career and a stint at running an IT business. He can write iptables firewall rules, set a rabbit trap, clear a jam in an IBM model 026 card punch and mix a mean whiskey sour.

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4 comments
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  • No, Not Really

    Microsoft is releasing ZuneBook soon!
    That will be the Future!


    ZuneResurection.blogspot.com
    Ballmerfeld
  • So basically they're opening themselves up to phishing.

    "It's no longer a matter of users checking the URL to make sure it's the bank's, and checking that the web browser displays the padlock icon that indicates an SSL-encryted connection. "

    So basically they're opening themselves up to phishing. Just because it's a tad more convenient (And not really all that convincingly so). And he basically avoids answering security questions from the snippets of the podcast I listened to (didn't have enough time to listen to the whole thing, I wish ZDNet would stop making podcasts into articles, or at least include transcripts).

    Umm, no, this ain't the future of online banking.
    CobraA1
  • Good luck with that

    Facebook and security are galaxies apart.
    root12
  • ID

    When you need to produce your identity to buy, trade, or sell your services ... Facebook is the perfect tool, since an SSN/EIN does not have a face attached nor a reputation. At least this way they can make sure economic slaves are completely loyal to their masters, deserving of their blessings to bank.
    Vapur9