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Guest post by: Mark Johnson Become an Author

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Each time you pull out plastic to pay for something, your bank is watching, analyzing and calculating every move you make.

When you take your debit or credit card and use it at the point of sale, banks can follow where you shop, how often you shop, and what you've purchased. Tracking your usage allows banks and issuers to amalgamate all this information, cross reference it with what they know about your income, lifestyle, and life stage, and deliver more tailored transactional marketing offers to you.

Banks, however, are very careful with your information --- 
and the new ads have been a hit with consumers. Like most consumers I'm concerned about my privacy and as long as I have a way to opt out or opt in, I’m comfortable. The Federal Trade Commission is proposing a new “do not track” program which would allow consumers to "opt out” completely, and federal lawmakers are considering a new law to limit how banks can use your information.

What does this mean from a marketing perspective? I believe this is an emerging area. Banks have a ton of transactional insight that they own, and with changes such as the Bank Card Act and the Durbin amendment, they are looking for ways to monetize this data. It is very similar to the manner in which grocery stores in the late 90’s and drug stores early and mid 00’s began to realize that they have a treasure trove of actionable data that they can monetize.

Credit cards have consumers’ shopping behavior across industries --- information that can give insight to retailers such as Wal-Mart or Home Depot. If modeled correctly through statistical analysis, this insight is invaluable. Yet the key is running the correct models.

The interesting piece is the huge interest in this arena. it is almost (and I am sure will grow to) the interest in mobile, yet I think the uptake will be quicker. This is going to be a very interesting space. It is the catalina model with no clear leader nor security issues (Cardlytics claims that no information leaves the hosting bank), yet there are SO many other groups that could do this. Amex already does it; so does Visa. So if these providers do not have the card portfolio, the merchants and CPGs need a good sales approach and a top notch analytics capacity.

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