Banks 'must balance personalisation and privacy'

Banks must balance the use of customer data to personalise products, with the potential to ‘freak them out’ in terms of privacy concerns, according to a Barclays tech guru.

Speaking at yesterday’s MoneyLIVE summit in London, Stephanie Waismann, chief customer officer at the Barclays Ventures offshoot, explained that consent was at the crux of personalisation.

“The relationship is not linear, and it can have an ugly side; data privacy,” she said. “You have to ask, when do customers get freaked out?”

Waismann suggested that perhaps younger Generation Z consumers would have a higher tolerance for the use of their personal information to personalise products and services, compared to older users, but reinforced the need for financial services firms to have the conversation about what to use.

She also referred to the recent unearthing of possible bias in the algorithms used by Goldman Sachs to set credit limits for the Apple Card, warning that such ethical issues must be considered when implementing machine learning, or institutions will risk breaking the customer trust placed in them.

In a later panel session at the conference, the issue of personalisation was investigated further, with Anna Swartling, head of customer experience design at Nordic corporate bank SEB Group sharing that her team had surveyed customers this summer and been surprised that between 70 and 90 per cent did not want personalised products based on their data.

“It was astonishing,” she said, adding: “Our hypothesis was that they were most positive about things that are less obviously upselling – they preferred advice on non-bank products for instance – the key is to understand what they value.”

Casey Lord, head of product Nutmeg, said that she has learned that many customers want financial services providers to earn the right to ask for their data. “There has to be a trade-off for value, so when a new data point is given, they receive something in return – at least a quadratic equation.”

Both agreed that it harked back to the famous Henry Ford quote about not asking customers what they want, as they would have just asked for faster horses rather than the Model T – rather businesses should analyse data to anticipate needs.

Lord added that in the future, Nutmeg would “be willing to work with BigTech partners” and that in the future she hoped that if the digital wealth manager can crack personalisation “we can close the advice gap”.

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