Libra: The Facebook revolution that the public doesn’t want

Most British consumers are suspicious of social media companies, and would be unhappy to trust them with their banking details, Consumer Intelligence data suggests.

Following announcements that Facebook is planning to launch its own cryptocurrency, Libra, the results suggest that, despite wide Facebook use, that the public may struggle to trust a currency linked to the social media site.

Consumer Intelligence asked over 1000 people across the UK in late June and early July. Four fifths of survey respondents - 80 per cent - said that they would be unhappy to link their social media with their banking, and 77 per cent said that they would not consider using the currency.

“Facebook’s announcement that it is planning its own cryptocurrency have already met with some opposition - not least from the US government ,” says Andy Buller, head of banking at Consumer Intelligence. “However, our figures show that it is the public that social media sites may have to work hardest to convince. Trust is a major issue within banking, and although millions of us seem happy to trust Facebook with our personal photos and data, trusting them with our money may be the sticking point - for now.”

Data distrust abounds

The Consumer Intelligence figures show that many British customers are still unhappy with social media security. Respondents were almost evenly split between those who do and don’t trust the way that social media sites keep data safe.

Chart 1: How happy are you with the way that social media sites keep your data safe? (where five is completely happy and 1 is completely unhappy)

Seventy nine per cent of respondents agreed or strongly agreed with the statement “I worry about social media companies having access to my financial details”, with 60 per cent strongly agreeing.

Chart 2: To what extent do you agree or disagree with the following statements? - I worry about social media companies having access to my financial details

A similar percentage of people believe that social media have too much power and too much access to their data.

Chart 3: To what extent do you agree or disagree with the following statements? - Social media companies have too much power and access to our data

But still social media use continues

Despite these misgivings, only eight per cent of respondents said that they did not use social media at all. Facebook remained the most popular social media platform by far, with Twitter and Instagram coming second and third.

Chart 4: Do you use any of the following?

Social media - a generational divide

Although Facebook is still the most widely used social media site, this month’s Consumer Intelligence survey reveal widespread generational differences in social media use. Younger people are more likely to use Instagram and Snapchat, and are also slightly more likely not to use Facebook. 72 per cent of those aged between 18 and 34 use Instagram, compared to 41 per cent of the entire population, while one percentage point fewer use Twitter.

Those aged between 35 and 54 are most likely to use Facebook (86 per cent), while those aged above 55 are the most likely not to use any social media (14 per cent)

Chart 5: Which social media do you use? (aged 18 to 34)

“The perception that Facebook is used by older people is borne out by our study,” Buller says. “However, with 80 per cent of younger people still using the site as well, the reach of the social media site is still immense.”

Knowledge and acceptance of Facebook’s currency is weak

Despite widespread coverage of Facebook’s plans to launch Libra, more than half of people still haven’t heard of the new currency.

Chart 6: Have you heard of Facebook’s plans to run its own currency, Libra?

Most state that they would be unlikely to use it, with 57 per cent saying they would definitely not consider doing so, and a further fifth saying they would not do so. Only seven per cent said they would definitely use such a currency.

Chart 7: Would you consider using Facebook’s currency?

“Mistrust of something new is common, especially when it comes to financial products,” says Andy Buller from Consumer Intelligence. “Nonetheless these figures are striking - most people do not find the idea of a social-media based currency appealing. Facebook may be surprised by the strength of feeling among site users when it comes to the possibility of the company handling banking transactions.”

The survey results suggest that other social media sites, such as Instagram, would also struggle if they tried to launch a currency. Over 60 per cent of consumers strongly disagreed with the statement “I would trust a social media company with my money”. Although this percentage was far lower among younger people - only 34 per cent of those aged 25-34 said the same, it still indicates a high level of misgivings about mixing social media and money.

Chart 8: To what extent do you agree or disagree with the following statements? - I would trust a social media company with my money

The survey also indicates that most people can’t see any benefit from using a social media company at all. Three quarters of respondents said that they did not think it would help them to manage their money better, and only 22 per cent thought using one to send money would be convenient.

Chart 9: To what extent do you agree or disagree with the following statement? Linking my banking to my social media would help me to manage my money better

Chart 10: To what extent do you agree or disagree with the following statement? - Sending money via a social media company like Facebook would be convenient

Cryptocurrency is a mystery to most

As well as struggling with Facebook as a currency provider, most people don’t understand the concept of cryptocurrency at all, and are suspicious of it, suggesting that Facebook must do more to win them round if they are to make a success of Libra.  Over half of respondents disagreed with the statement “I understand cryptocurrencies and blockchain”, and only a fifth said they thought this was the future of global finance.

Chart 11: To what extent do you agree or disagree with the following statements? - I understand cryptocurrencies and blockchain (the technology behind currencies like Facebook’s)

Chart 12: To what extent do you agree or disagree with the following statements? - Cryptocurrency and blockchain are the future for global finance

However, most agreed that it was important to understand this technology if you are to use currencies based on the blockchain, such as Libra”.

Chart 13: To what extent do you agree or disagree with the following statements? - It is important to understand how new currencies run by social media groups will work if you’re to use them

Most respondents disagreed with the assumption that social media companies are well-placed to become global banks, despite many industry commentators believing this to be an obvious next step.

“The public is more sceptical about social media companies branching into finance than many Fintech experts believe,” says Buller. “They may be less accepting of initiatives like Libra than the industry expects. It’s really important that social media businesses embark on an education process if they want to launch currencies like this,” Mr Buller says. “Confusion reigns about how these currencies work, and unless the public understands this they will be slow to use them.”

Chart 14: To what extent do you agree or disagree with the following statements? - Social media companies are well placed to become global banks

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