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Friday, 13 April 2018

Facebook, banking & Application Programming Interfaces

"For years, we have been describing the risks — to banks and customers — that arise when customers freely give away their bank passcodes to third-party services, allowing virtually unlimited access to their data. Customers often do not know the liability this may create for them if their passcode is misused, and, in many cases, they do not realize how their data are being used. For example, access to the data may continue for years after customers have stopped using the third-party services." Excerpt from JP Morgan Chase's 2018 annual shareholder letter.

The above represents a stark contrast and parallel between Facebook and Retail banking. The current issues at Facebook, regarding inappropriate use of customer data by third parties (eg, Cambridge Analytica), are an accident waiting to happen in Retail banking. Payment Services Directive 2 (my 2016 blog) will allow similar Application Programming Interfaces (APIs).


Whenever you use your Facebook account to log into a separate account, you're actually using an API (eg, researchersTinder). For many people, it is easy and efficient doing this because you no longer need to remember your login credentials, like email and password. However, you are also giving away your privacy to an unknown extent.

The future API's in retail banking, following PSD2, are likely to create further privacy related scandals. Officially, PSD2 articles 66 and 67 do not allow requesting or storing "sensitive payment data". Sensitive payment data are all payment data, except for name and account number; see PSD article 4(32). Also see my 2016 blog on PSD2.

Medium 2018: "Companies like Facebook will only be able to invade enough of your privacy if you spend enough time staring at their sites, apps, and emails. You being hooked is core to the plan. But ultimately, it’s not about Facebook. Facebook could disappear tomorrow and we’d just build a new toy we couldn’t put down. A junkie doesn’t quit because one dealer gets busted."

The Needle and the Damage Done (1972) by Neil Young
artist, lyrics, video, Wiki-1, Wiki-2

I've seen the needle and the damage done
A little part of it in everyone
But every junkie's like a settin' sun


Note: all markings (bold, italic, underlining) by LO unless stated otherwise