Bank behind your credit or debit card.
Banks, data on your spending habits could be a gold mine
For years, Google and Facebook have been showing ads based on their online behavior. Amazon retailers at Walgreens also regularly suck their transaction history to direct future expenses and maintain their loyalty.
Now, banks also want to convert the data they already have about their spending habits into additional income by identifying probable customers for retailers. Banks are increasingly aware that they could be sitting in a gold mine of information that can be used to predict, or influence, where they spend. Historically, such data has been used primarily for fraud protection.
Suppose you have the pleasure of having lunch on Cyber Monday, the most active online shopping day of the year. If you order in advance in Chipotle, paying, of course, with your credit card, it is possible that your bank will soon hang up a 10 discount on lunch at Little Caesars. The bank would earn pizzeria fees, both for showing the offer and for processing the payment.
Wells Fargo began customizing retail offers for individual clients on November 21, joining Chase, Bank of America, PNC, SunTrust and a large number of smaller banks.
Unlike Google or Facebook, who try to infer what you are interested in buying based on your searches, visits to the web or I like it, "the banks have the secret weapon because they really know what we spend the money on," said Silvio Tavares about trade. Group CardLinx Association, whose members help offer brokers related to the purchase. "It is a better predictor of what we are going to spend."
While banks say they are moving cautiously and taking privacy concerns into account, it is not clear that consumers are fully aware of what their banks are doing.
Banks know many of our deepest and darkest secrets: that series of bills paid at a cancer clinic, for example, or that big bill from the strip club that you thought stayed in Las Vegas. A bank may suspect someone's adulterous adventure long before the betrayed couple does.
"Ten years ago, his bank was like his psychiatrist or his minister: his bank kept secrets," said Ed Mierzwinski, a consumer advocate at the US Public Interest Research Group. UU. Now, he says, "they think they are the same as a department store or an online merchant."
The startup Cardlytics, one of the pioneers of the field, executes the offer programs for Wells Fargo, Chase and other banks. Despite these associations, Cardlytics says it obtains information on around $ 2.8 billion of annual consumer spending worldwide.
A rival of Cardlytics called Augeo runs a similar program with other banks, which he declined to name. American Express has an internal program for its cardholders. Visa points to offers in the Uber application for travel credits and food delivery.
Although banks only know where they have bought, and not specifically what they have bought, they can often make informed guesses. After all, you are not likely to be in a liquor store for french fries.
The bank can infer other things you like. It would be a good idea if you are about to travel if you have charged a flight or a hotel stay. HSBC is looking to use that data to set up automatic alerts, so don't reject the use of your card as fraudulent when you start charging for meals in Kathmandu or Karachi.
The next step is to make specific location offers, maybe to rent a car, as soon as it lands. Marcos Meneguzzi, head of cards and unsecured loans of HSBC in the US. UU., He said that cardholders will accept such offers, at least when they are relevant. But he warns that banks could easily surpass and lose the trust of their customers.
Many of these efforts remain in their infancy, and it is still unclear how well they will realize. Cardlytics programs, for example, do not send offers through notifications. You should look for them in your banking application or website.