Big Data and Social Netbanks: Are You Ready to Replace Your Bank?

This Article directs scholarly and regulatory attention to an overlooked subcategory within online and mobile entities that offer financial services--big data and social netbanks. Recently, big data companies like Google, Amazon, and Apple, as well as social networks like Facebook and Twitter, have been making forays into the financial services market, capitalizing on their massive troves of user data and social information. Providing the first in-depth study of big data and social netbanks, this Article analyzes these players' entry into the financial services market and surveys the current regulatory framework for those new bank-like entities. Despite the large numbers of technology companies offering financial services and their massive pool of subscribers, regulation of online nonbanks currently consists of a hodgepodge of statutes and regulations. In particular, as this Article shows, existing regulation does not differentiate between this recently emerging form of bank-like services and other online/mobile nonbanks. As big data and social netbanks increasingly eat at the edges of the traditional banking market, this Article makes a key descriptive contribution by presenting a comprehensive analysis of the new entrants. This Article also makes a significant normative contribution by listing the distinctive characteristics of big data and social netbanks and other issues that regulators should be mindful of when designing an appropriate regulatory scheme. These characteristics and issues include consumers' access to financial services, social consequences, competition in the financial market, cybersecurity, privacy, and specific consumers' rights.