APAC willing to trade data for better financial products and advice
WHEN businesses ask customers for data, it makes them uncomfortable.
In the aftermath of the Cambridge Analytica scandal, customers are right to ask questions about how their information is used.
However, it seems as though the banking and financial services industry, as a result of regulatory oversight, enjoys a higher degree of consumer confidence when it comes to handling data.
According to a new Accenture study, more than half of consumers would share that data for benefits including more-rapid loan approvals, discounts on gym memberships and personalized offers based on current location.
More specifically, about 60 percent of consumers are willing to share significant personal information, such as location data and lifestyle information, with their bank and insurer in exchange for lower pricing on products and services.
In banking, 81 percent of consumers would be willing to share income, location and lifestyle habit data for rapid loan approval, and 76 percent would do so to receive personalized offers based on their location, such as discounts from a retailer.
Further, half (51 percent) of all consumers surveyed said they want their bank to provide updates on how much money they have until their next payday, and 57 percent want savings tips based on their spending habits.
Customers are keen, but bankers must be cautious
“Although consumers want banks and insurers to use their data to play an active role in improving their lives, banks should tread cautiously, ensuring they fully understand their customers by providing relevant, in-the-moment offers while continuing to safeguard consumer data,” said Accenture Senior MD Piercarlo Gera.
Among all the customers who responded to the survey, the appetite for sharing significant personal data with financial firms was highest in China, with 67 percent of consumers there willing to share more data for personalized services.
Half (50 percent) of consumers in the US said they were willing to share more data for personalized services, and in Europe — where the General Data Protection Regulation took effect in May — consumers were found to be more skeptical.
For instance, only 40 percent of consumers in both the UK and Germany said they would be willing to share more data with banks and insurers in return for personalized services.
“In Europe, where open banking regulations compel banks to share data with third parties, customers are much more reluctant to share their data.”
“We are still in the early stages of Europe’s burgeoning Open Banking revolution, and I expect consumer attitudes there to evolve as banks invest in and offer more relevant services.”
“Financial firms have a huge responsibility to maintain their role as trusted custodians of data privacy. Banks and insurers that don’t seize the opportunity to build on this trust and improve customer experiences risk becoming lost in the plumbing of payments or compensating claims,” warned Bruce Holly, Gera’s counterpart in North America.