Join the Community

21,947
Expert opinions
44,032
Total members
431
New members (last 30 days)
179
New opinions (last 30 days)
28,659
Total comments

The must of trust: preserving customer privacy

  1 1 comment

“May I have your data?”

”Depends on who’s asking!”

Banks need data from customers to provide them with a differentiated service. They won’t get very far though, until they establish themselves as responsible and trustworthy in customers’ eyes.

While these individuals are willing to share information for a real benefit—providing historical transaction details to an account for financial planning or tax efficiency analysis, for example—they are less likely to provide information when they can’t see an advantage in doing so.  

This conflicts with many banks’ current ‘big data’ strategies where the goal is to capture customer data in the hope that it can be used to tailor a better product or offering for these customers.

The challenge for banks is that they need to differentiate themselves from the bevy of organizations that are mining customer data for malicious purposes such as snooping (the National Security Agency (NSA) PRISM scandal, identify theft, and phishing for fraudulent financial gain.

Building trust

Banks need to demonstrate three things in order to earn the trust of their customers:

  • Commitment to safeguarding customer data
  • Transparency in how they use it
  • Accountability in case they get it wrong (perhaps most important of all)

When it comes to commitment, most banks are already focusing their IT budgets on implementing systems and processes that secure communications with customers especially now that data security and fraud prevention are high on most people’s agendas.

In these times of innovation in digital and mobile banking, banks are also starting to tap into big data sources such as social media and browsing habits, and they will need to strengthen their security solutions to cover these sources as well.

That leaves transparency and accountability. Banks can demonstrate adherence to these values by adopting a strong ‘customer first’ attitude across all their channels. Here they can help nurture a relationship of trust by developing a customer charter that outlines the bank’s commitment, responsibility and accountability concerning the collection and use of customer data.

Nobody is perfect, but if the leadership fosters these values and instils them in the organizational culture, banks have the potential to appeal to customers at the emotional level. But when we do get it wrong though, we must learn from the CEO of Toyota, Akio Toyoda—just make sure you get your bow right!

 

External

This content is provided by an external author without editing by Finextra. It expresses the views and opinions of the author.

Join the Community

21,947
Expert opinions
44,032
Total members
431
New members (last 30 days)
179
New opinions (last 30 days)
28,659
Total comments

Trending

Kyrylo Reitor

Kyrylo Reitor Chief Marketing Officer at International Fintech Business

Future of SPI in Poland

Now Hiring