For banks, data on your spending habits could be a gold mine

Rewards offered through Chase bank are displayed on an iPhone in the Brooklyn borough of New York. Banks want to turn data they already have on your spending habits into extra revenue by identifying likely customers for retailers.

NEW YORK (AP) — There’s a powerful new player watching what you buy so it can tailor product offerings for you: the bank behind your credit or debit card.

For years, Google and Facebook have been showing ads based on your online behavior. Retailers from Amazon to Walgreens also regularly suction up your transaction history to steer future spending and hold your loyalty.

Now banks, too, want to turn data they already have on your spending habits into extra revenue by identifying likely customers for retailers. Banks are increasingly aware that they could be sitting on a gold mine of information that can be used to predict — or sway — where you spend. Historically, such data has been used mostly for fraud protection.

Suppose you were to treat yourself to lunch on Cyber Monday, the busiest online shopping day of the year. If you order ahead at Chipotle — paying, of course, with your credit card — you might soon find your bank dangling 10% off lunch at Little Caesars. The bank would earn fees from the pizza joint, both for showing the offer and processing the payment.

Wells Fargo began customizing retail offers for individual customers on Nov. 21, joining Chase, Bank of America, PNC, SunTrust and a slew of smaller banks.

Unlike Google or Facebook, which try to infer what you’re interested in buying based on your searches, web visits or likes, “banks have the secret weapon in that they actually know what we spend money on,” said Silvio Tavares of the trade group CardLinx Association, whose members help broker purchase-related offers. “It’s a better predictor of what we’re going to spend on.”

While banks say they’re moving cautiously and being mindful of privacy concerns, it’s not clear that consumers are fully aware of what their banks are up to.

Banks know many of our deepest, darkest secrets — that series of bills paid at a cancer clinic, for instance, or that big strip-club tab that you thought stayed in Vegas. A bank might suspect someone’s adulterous affair long before the betrayed partner would.

“Ten years ago, your bank was like your psychiatrist or your minister — your bank kept secrets,” said Ed Mierzwinski, a consumer advocate at the U.S. Public Interest Research Group. Now, he says, “they think they are the same as a department store or an online merchant.”

As far as these companies are concerned, Americans have repeatedly demonstrated that they value freebies and discounts more than intangible privacy concerns.

“Consumers understand the banks are giving them ways to save money based on how they shop,” said Scott Grimes, CEO and co-founder of Cardlytics.

But banks often don’t explain clearly what they’re doing with your data, even though they sometimes share your transactions with outside data companies to process offers. And many banks don’t seek explicit consent, instead including these programs by reference in general agreements for the card or online banking.

Copyright 2019 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

(0) comments

Welcome to the discussion.

Please note: Online comments may also run in our print publications.
Keep it clean. Please avoid obscene, vulgar, lewd, racist or sexually-oriented language.
Please turn off your CAPS LOCK.
No personal attacks. Discuss issues & opinions rather than denigrating someone with an opposing view.
No political attacks. Refrain from using negative slang when identifying political parties.
Be truthful. Don’t knowingly lie about anyone or anything.
Be proactive. Use the “Report” link on each comment to let us know of abusive posts.
Share with us. We’d love to hear eyewitness accounts or history behind an article.
Use your real name: Anonymous commenting is not allowed.