Unless you keep all of your money under a mattress or in a sock drawer, you're probably using a bank like most people. But banks are no longer in the business of simply holding onto our money, organizing payments and providing incentives for us to save and build our wealth. According to a new report from Fox New York, most major banks---and several minor ones, too---now use our financial data to have third-parties market retail offers to us. Wells Fargo, Chase, Bank of America, PNC and Suntrust are among the banks who engage in some form of this customized marketing.
The digital revolution in the last two decades has led to companies like Google, Facebook and Amazon mining data on people's habits, likes, locations and interests---all used or sold to businesses for targeted advertising and marketing. Until recently, banks largely stayed out of that business, only using customers' financial data for fraud protection. "(Banks) were like a psychiatrist, a priest, or a minister," says Ed Mierzwinski with Texas Public Interest Research Group. "They kept your information secret, in the vault."
Now, banks know they are sitting on a treasure trove of data, and companies like Facebook know it as well. "Today, instead of keeping your information secret, they've realized that your information is valuable, and in fact maybe more valuable than what Facebook knows," says Mierzwinski. "The banks know how much you spend and where you spend it, so they're monetizing what used to be private information about how much money you have."
Under federal law, banks must allow customers to opt out of marketing offers. But that info and how to do so is usually buried in the general account agreements, so it's not always easy to find. That means unless you voluntarily opt-out or go back to mattress-sock drawer money storage, expect this to continue. "The bank is making more money, because it's convincing others to sell you things that you don't even know you wanted," says Mierzwinski.