On the surface, banks have mastered the art of protecting customer privacy. In fact, every firm on the Gomez Internet Banker and Credit Card scorecards posts a privacy link directly on their homepage. However, financial services firms must take additional steps beyond these fine-print policies to truly demonstrate their understanding of privacy concerns.
Let's take a look at a few of the better approaches across the financial services industry.
Among the 19 credit card issuers on the Internet Credit Card Scorecard, 79% provide this link. Citibank, however, stands out by prominently messaging privacy on its online enrollment form.
Inform Customers How Personal Information Will Be Utilized
Requests for sensitive personal information including Social Security Number (SSN), employment history and relationship with other financial institutions are the norm in online account applications. Yet most financial institutions do a poor job of disclosing why they need specific information and how it will be used.
Consider the example of Prudential Insurance, which requests (but does not require) that customers enter their SSNs as part of the auto quote process. Prudential alleviates customers' concerns by disclosing how it will use the data and why it would be beneficial to the customer to provide this information.
Chase provides another strong example on its online checking account application. The financial services giant informs customers that their e-mail addresses will be used "to send ... updates on your application." The firm then provides an additional check box for customers who are interested in receiving marketing messages from Chase via e-mail.
Allow Customers To Control Preferences
The aforementioned Chase example illustrates a final area of opportunity for financial institutions: allowing customers to control marketing preferences online. In most cases, customers are limited to specifying their e-mail preferences (often only when they initially enter the information) and still must utilize other channels to control their phone and mail preferences.
Credit card issuer Juniper provides a strong example of a way to allow customers to modify marketing preferences across channels using the online account management interface. Furthermore, Juniper further differentiates itself by allowing customers to control preferences for both Juniper and third-party marketing content.
U.S. law requires that banks inform customers how their information will be used and allows them to remove themselves from marketing lists. By placing privacy information online and in the customer's path, and allowing customers to modify preferences online, banks are better serving customers' needs and potentially reducing their operational costs. We know that privacy and security concerns remain the primary reason why offline bankers don't bank online.
Paying attention to these concerns can influence more and more customers to transact via the lower cost online channel, enabling the Internet to live up to its lofty business goal of reducing costs and increasing loyalty.
Moriah Campbell-Holt is an online banking and credit card industry analyst at Gomez, Inc., a Waltham, MA Internet benchmarking and improvement strategies firm. She can be reached at email@example.com.
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