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Home > Privacy and Business > Financial Privacy > The Value of Free-Flowing Financial Information > Better Prices and Special Offers


Better Prices and Special Offers

Sharing of financial information allows companies to provide discounts to consumers for services that may be offered by third parties and affiliates. Discounts may be offered for buying a bundle of services or for buying several different types of insurance from different companies through the same sales channel. When this happens, consumers benefit from the reduced cost of executing the transaction.

Shared financial information allows companies to make proactive offers to consumers. If a financial services company is aware of a change in a customer's financial status or needs, the company may proactively reach out to the consumer with a product that is appropriate for him or her. Consumers who may be unaware of all their financial options may particularly benefit from this. At the same time, consumers who are particularly sensitized to information-sharing may be offended by approaches of this kind. There is a heavy burden on financial services companies to be cautious in this area.

In a study performed for the Financial Services Roundtable (FSR), Ernst & Young found that customers of FSR member companies may save as much as one hour per year and $75-100 dollars because of proactive financial offers. In the aggregate, this represents about $7 billion dollars and 50 million hours per year just among customers of FSR member companies.

Consumers should be offered the opportunity to decline information sharing that would bring them discounts and special offers. Given the legal obligation that holders of information have to protect the privacy of consumers' information, however, it is unlikely that many consumers would.


Links:

Customer Benefits from Current Information Sharing by Financial Services Companies by Ernst & Young (December 2000)

Comments? comments@privacilla.org (Subject: SpecialOffers)

[updated 04/18/02]



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