How much data will financial consumers be willing to share in the future?
Payments expert outlines importance of transparency and trust in the digital age at WorldFuture 2016
DES MOINES, IA (August 11, 2016) — Before an international audience of futurists at the WorldFuture 2016 conference, TMG Financial Services’ Eric Schurr shared his thoughts on the factors that could drive future scenarios where personalization and data privacy intersect. Schurr, chief strategy officer for the credit card agent-issuer and advisory services firm, said consumers are becoming increasingly aware of the double-edged sword that comes from broadly sharing their personal data.
To illustrate his point, Schurr shared a story of the day he logged into Amazon to update his payment credentials. He was surprised to see how many of his payment cards he had loaded into the service over the many years he had been a user.
“I realized I’d created a substantial digital footprint just with Amazon alone,” said Schurr. “I also acknowledged the pros and cons of sharing that and other information. The more information I allow Amazon access to, the narrower my search results. Maybe this is a good thing because it enhances the personalization of my experience. But maybe this is a bad thing. Perhaps there is more out there I want to find – more products, books, tools I’d like – but Amazon’s algorithms don’t think I would like them, so I don’t see them.”
He continued, “Like it or not, data analytics is creating an invisible shield around portions of the Internet, and that’s going to be frustrating to several consumer segments in the future.”
This will become especially important as digital natives age, Schurr believes. “Fifty years from now, the records of nearly every individual on the planet will paint a cradle-to-grave picture, and any number of decisions will be made based on those pictures,” said Schurr. He added consumers of the future will be assigned what he called a ‘digital footprint score’ to help government, banking, insurance and other parties evaluate things like creditworthiness.
Schurr also discussed the evolution of the value consumers will place on the security of their personally identifiable information. Harkening back to his Amazon digital footprint, he said “I’m trusting Amazon to keep my information secure, but are they? Today, many banking and other apps present consumers with a ‘take it or leave it’ offer. Largely, we are not given a choice of how much data we want to open up. If you want this app, you have to allow it access to your contacts. If you want this one, you have to allow it access to your location.”
These ‘take it or leave it’ offers are working largely because consumers are willing to share their data if they can see the value. If you want to play Pokemon Go, for example, you have to allow access to your camera. Trust is another important reason consumers share. Today, financial institutions have trust on their sides – something Schurr says is delicate and must be carefully managed today and into the future.
“Trust and transparency will be key to striking a balance with future consumers who will be more savvy about how their data is being used to personalize their experiences,” Schurr said. “While today’s banking customers may be okay with ‘take it or leave it’ apps, I expect that to change in the future. Success will come to those who are clear with consumers about the information that’s being collected, how it’s being applied and with which entities it is being shared.”
At the conclusion of his presentation, Schurr shared advice for financial institutions and others on how to design fruitful and ethical data-collections strategies. “Consumers of the future will ask you to demonstrate competency in four areas.” Schurr insisted companies be sure to communicate they are:
- Keeping consumer data secure
- Providing real value in trade for the data
- Innovating to provide even greater value in the future
- Always telling the truth
About TMG Financial Services
TMG Financial Services (TMGFS) is known for providing collaborative, innovative and consumer-oriented solutions in the payments industry. With comprehensive credit card programs, products and services, TMGFS ensures financial institutions and member-based associations have the tools to thrive in the competitive financial services marketplace. TMGFS was named one of America’s fastest-growing companies by Inc. Magazine and currently has more than 127,500 credit cards and $198.8 million in assets under management. For more information, visit www.tmgfinancialservices.com.