Social Banking: A New Frontier for Facebook
Facebook (NASDAQ:FB) makes most of its money from social advertising and virtual goods sales, but it is looking at other avenues to speed up revenue growth. It aims to become the ultimate online destination for its users by offering a variety of services, including basic online banking services. [1]
One way it looks to do this is by tying up with major banks to enable users to pay their bills, transfer funds and do other basic account related transactions online through its platform. In the initial rollout, Facebook is working with Australia’s Commonwealth Bank, allowing its customers to send money easily to their friends.
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Facebook is already working on social commerce and may be able to tie that in with its social banking offering. We expect Facebook to leverage the tons of social data it has on each user and disrupt various industries like advertising, banking and retail.
With such a move, Facebook aims to not only improve engagement on its platform by offering private services, but also generate additional revenue streams by throwing different services like this on the wall and seeing what sticks. While Facebook may not be looking to monetize this right now, it may eventually figure out a way to monetize the users who use its banking platform.
However, this will depend on whether the platform is able to pick up steam considering that customers will be cautious in making financial transactions through a social media channel.
We currently have a $33 Trefis price estimate for Facebook, which stands just above its market price.
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Notes:- Facebook wants to be your online bank, Fortune [↩]