We recently commented on Facebook’s (FB) rumored interest in the online social banking space, which seems to be the next logical progression after internet and mobile banking offerings from major banks have firmly taken root. Apparently, Citibank (C) may already be working such a social banking offering on the Facebook platform. Citibank has a significant presence on Facebook, which it leverages to interact with customers, offer customer service and gain feedback. This week, it asked its social media audience whether they would do their banking on Facebook, if they could. [Citi planning Facebook banking?, The Economic Times]
Understandably, this question evoked a lot of reactions including concerns about security and privacy, but it highlights the focus of major banks like Citibank on social banking, which could be the next big innovation in the financial sector.
While this initiative by Citibank doesn’t seem to be linked with Facebook’s reported foray into social banking where it would actually partner with banks to offer their services on a customized, secure platform inside Facebook, Citibank could actually be one of its initial partners.
In any case, social banking could help Facebook not only improve engagement on its platform by offering additional services, but also generate additional revenue going forward as Facebook eventually figures out how to monetize users in a better way, using data and insights generated through their social banking transactions.
We currently have a $33 Trefis price estimate for Facebook, which stands just above its market price.
Disclosure: No positions