Facebook is innovating once again, this time in the banking industry. The university tech start up which revolutionised the social media landscape and previously created an artificial intelligence program that was able to communicate independently, is at it again. The media giant has been working on creating its own digital cryptocurrency that, could see it trump major traditional banking firms. Facebook has been secretly working on developing the existing media platform, to allow its users to have their own currency.
Other tech giants like Google and Apple have already developed Google pay and Apple pay respectively, which allows consumers to pay for their product on their phones. However, Facebook appears to be going one step further, it is creating its own currency and cutting out the middle man (the bank in this case). It should come as no surprise that perhaps this makes the banks a little nervous. In addition to this, banks also have to fend off competition from fin-tech start ups such as Revolut, Monzo and others which provide better services, especially to the millennial generation. The banks are sometimes seen as inefficient and costly, especially with the rates they charge their customers.
Facebook has been talking with cryptocurrency and digital fin-tech providers to try to create the sort of exchange, that is usually seen the FX market or stock market. The benefits of such a cryptocurrency would mean customers or users of Facebook would be able to buy and sell products without having to worry about currency exchange, filling out banking details or even going to another third party retail website. All transactions would take place in one place, Facebook. Also because Facebook is underwriting its customers currency, it will be indirectly providing similar services to central banks. With the billions of users of facebook, it will be able to boast being one of the largest banks in the industry. It remains to be seen how the banks would react to such a move from facebook and other tech companies. Some are already innovating or rather trying to innovate, while others are partnering with fin-tech start-ups in order remain relevant in the digital revolution.