By Bob Sullivan
While consumers have come to expect services that are tailored to their individual needs, they are also increasingly concerned with how their personal information is used-and how their privacy is protected.
It’s no secret that data is constantly being collected from consumers; where they shop, what they buy, how much they spend and even their social media activity. In fact, according to Google CEO David Schmidt, every two days we create as much information as we did from the beginning of civilization up to 2003. Although we live in an age of over-sharing, many consumers still find the tracking of all this information intrusive, especially when it comes to more personal details.
Credit unions stand to gain significant benefits from leveraging consumer data, but face challenges in respecting members’ privacy and ensuring their confidence in the security of their data. To help overcome consumer doubt, it is important for credit unions to clarify to their account-holders that the data collected is being used for their benefit, and not just for the selling efforts of the CU. There are a few steps that will allow this to be successful:
- Give account holders thorough and specific opt-in options for what data they are willing to share
- Develop robust and tangible rewards for using services that help create data. Consider a loyalty system that rewards members when they leverage online banking, debit cards, PFM and other tools that act as data aggregators. This can be as simple as “points” associated with login or use or using a certain card frequently.
- Promote the usefulness of an alerts program that’s driven by transaction-level data. Besides basic alerts, such as when a balance is getting low, members should be able to customize alerts based on spending, for instance being notified when they are getting dangerously close to their credit limit on a certain card with a transaction. The program is made richer by the account holder’s spending data, which they would need to opt in to provide the CU, while seeing important benefits themselves.
Credit unions must tread lightly in order to gain access to this information without being accused of “big brother” actions; member buy-in is pivotal. For members to be fully willing to participate in data sharing, you must provide incentives as well as confidence in the credit union’s use of that information.
Bob Sullivan is founder and president of Financial Apps, a provider of technology that facilitates access to and management of financial data. For info: www.financialapps.com.