49% of US and UK would not trust Facebook for cryptocurrency

Not many people understand the complexities of cryptocurrency and an alarming number of people don’t trust Facebook; it seems combining the two is not a well-received idea.

New research from messaging app Viber has suggested 49% of consumers in the UK and US would not trust the social media giant when it comes to cryptocurrency. Facebook might want to get a foothold in this embryonic segment of the technology industry, however if consumers have lost trust in the firm, you have to wonder whether this will kill the potential of cryptocurrency through association.

There are two interesting areas concerning Facebook’s drive towards cryptocurrency. Firstly, many people will start asking what cryptocurrency actually is and what it does. And secondly, when talking about money, many will start to question whether Facebook should be considered a trusted partner with its track record.

Starting with the definition of cryptocurrency, we will not pretend to be an expert on the segment and few in the general public will have a concrete grasp either. This lack of understanding creates uneasiness and a lack of trust, while the fact it is largely unregulated simply compounds this sense of nervousness.

This environment of confusion also seems to filter upwards towards governments and regulators; no-one has seemed to want to take ownership and when it was suggested the Swiss would take the lead, the Swiss regulator seemed very confused.

We’ve already seen the complications the world faces when a void in the regulatory landscape is formed and it does seem cryptocurrency is heading the same direction. Talking about the issues which arise during a regulatory void, this leads us onto the second interesting point brought forward in this research.

In the UK, 49% of consumers has suggested they would not trust Facebook at all when it comes to keeping information secure through its new cryptocurrency service Libra. Only 4% said they would trust Facebook, while 28% have not made their mind up. The numbers were remarkably similar for consumers in the US, however even less, 2.5%, explicitly stated they would trust Facebook.

Over the last 12-18 months, Facebook has destroyed any credibility the consumer had in it and has done little to earn it back. Cambridge Analytica has a disaster for Facebook though Facebook’s response to investigations and leaked memos since have further fuelled the distaste felt by the consumer towards the social media giant. Largely, the fallout from this saga is in the past, but the damage to Facebook’s reputation has been dealt.

Dealing with personal information is one thing but managing transactions and handling financial data is a completely different ask. Facebook is asking for a lot of trust and credit with the launch of Libra. As mentioned before, if Facebook is attempting to be the poster-boy to take the concept of cryptocurrency to the masses, let’s hope its reputation does not pollute a potentially very exciting segment.

Could a security breach de-rail the magenta express train?

T-Mobile, ably led by wild-eyed CEO John Legere, has been causing chaos throughout the US wireless market, but a data-breach could impact the brands credibility in the eyes of customers.

Customer opinion is a fickle thing. It can sometimes only take a minor incident and all of a sudden the brand is as attractive as a turd in a washing machine. T-Mobile has been generating some serious momentum over the last few years, readily stealing subscribers from the likes of AT&T and Verizon by undercutting tariffs, though how much of an impact with a data-breach have on brand perception?

“Out of an abundance of caution, we wanted to let you know about an incident that we recently handled that may have impacted some of your personal information,” T-Mobile wrote in a statement to customers.

“On August 20, our cyber-security team discovered and shut down an unauthorized access to certain information, including yours, and we promptly reported it to authorities. None of your financial data (including credit card information) or social security numbers were involved, and no passwords were compromised. However, you should know that some of your personal information may have been exposed, which may have included one or more of the following: name, billing zip code, phone number, email address, account number and account type (prepaid or postpaid).”

According to reports and rumours across the industry, the breach could have left as many as 2.5 million subscribers exposed to the attack. According a T-Mobile spokesperson talking to Motherboard, the incident occurred after hackers compromised company servers through an API, although no further technical details have been disclosed. The attackers are believed to be international.

This is not the first time T-Mobile US has been exposed for security flaws. In May, researcher Ryan Stephenson found a bug which allowed external parties to access customer information just using a phone number. An API used by T-Mobile staff allowed them to look up customer details simply by entering their phone number, though it was not password protected meaning anyone could take advantage of the short-cut if they found the sub-domain. The oversight unveiled a customer’s name, address, billing account number, and in some cases, information about tax identification numbers, as well as security question information.

Every company will have flaws in the system, the perimeters are simply too vast nowadays making the concept of 100% secure almost impossible. The issue here is about credibility; how much of an impact will the news have on customers perception of T-Mobile as a brand and a trusted guardian of their personal information?

As mentioned before, customers are very fickle, especially when much of the attraction to a brand is based on price. Some customers might be asking a simple question now; are a few saved dollars each month worth the risk of my personal information being exposed? T-Mobile has been excellent at hoovering up new subscribers over the last couple of years, but this has been due to highly aggressive marketing moves focused on acquisition. The retention capabilities of the brand have not genuinely been put to the test.

With data protection and privacy high on the agenda following several scandals, most notably the Facebook Cambridge Analytica saga, customers are becoming more sensitive to such incidents. Whether this is enough to de-rail the magenta steam train remains to be seen, but it does ask questions over the company’s credentials.