Banks pass on customer shopping habits to retailers

Some banks are using customers’ shopping habits to generate a new revenue stream. According to CNN, some retailers are using data supplied by banks to send out targeted offers to potential customers. The messages may come via emails, texts or in bank statements. Should you be worried?

According to CNN, “The banks don’t actually hand over your data to retailers. Instead, retailers describe what type of customer they’d like to target and the bank then sends the deal to customers who fit the profile. When the customer cashes in on the deal, the bank gets paid a commission.”

If you are uncomfortable with your data being used in this way, you have the right to opt out. But more banks are using this approach to generate funds, since they get a cut of successful transactions. In fact, such deals are expected to bring in about $1.7 billion to banks by 2015, forecasts research firm Aite Group.

But you may also view these types of programs as incentives for doing business with certain banks. Many people look for credit card offers with rewards programs, and these type of targeted discounts may become more popular with consumers looking for shopping deals.

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