The new face of banking

These days it seems as though Facebook is everywhere. Some days it is being presented as the future of communication, the holy grail of client insight, or the latest stock to buy (or not buy as the case may be).

Mark Zuckerberg, founder and CEO, was ranked 35th on the Forbes 500 billionaire list in March before monetising his holdings in the IPO last month. While the fluctuating Facebook stock price has dented his fortune (he has dropped out of the top 40 according to the Bloomberg Billionaire Index) he is still worth north of $14bn (E11bn).

Mr Zuckerberg is the latest addition to an elite group; he is just one of 89 billionaires alive who have made their fortune in the technology sector. This is also a young group, as the technology billionaires have the lowest median age (52) of the Forbes 500 industry sectors. They have more time than most to continue growing their wealth.

Other Facebook employees have not done too badly out of the deal. The average Facebook employee was worth $2.9m at the offer price, and even with the falling share price are they are still newly minted high net worth individuals (HNWs).

The burning question to us is what will they want to do with their wealth. And, more significantly, how will their knowledge and experience of community building affect their choices when working with wealth managers.

For their wealth to continue to grow, Facebook will need to keep evolving. Since the lukewarm IPO in terms of the share price performance there have been rumblings that the Facebook business model is slowing. With close to a billion users, the population has potentially peaked so Facebook is considering new ways to monetise and demonstrate value. New ideas include a paid app store and “highlighting posts”, but perhaps there’s something more ambitious available.

What about a “Facebook Family Office”? This would make use of the beta group of the concentrated wealth of HNWs already in the firm to experiment on new ways to bank. As these ideas are developed it could reach out to a segment of those billion users to help grow their wealth, in addition to their digital crops in Farmville.

After all, the power of a Facebook profile means that the firm knows its users just as well as their friends do and certainly better than their bank does. Many of these users are already high net worth, and might appreciate a customised financial relationship and digitally-enhanced products.

“FaceBank” could be a fully digital offering provided by a brand that people have trusted with their personal information for almost a decade. The truth is Facebook could be the world’s largest bank had they the ambition, and while there is currently a gap between Facebook and world domination, they are closer than most.

Alexander Johnson, senior analyst at wealth management think-tank Scorpio Partnership

There are 89 living billionaires who have made their fortunes in the technology sector

Technology billionaires have the lowest median age (52) of the Forbes 500 industry sectors