For Banks, Data On Your Spending Habits Could Be A Gold Mine

There’s a powerful new player watching what you buy so it can tailor product offerings for you: the bank behind your credit or debit card.

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For years, Google and Facebook have been showing ads based on your online behavior. Retailers from Amazon to Walgreens also regularly suction up your transaction history to steer future spending and hold your loyalty.

Now banks, too, want to turn data they already have on your spending habits into extra revenue by identifying likely customers for retailers. Banks are increasingly aware that they could be sitting on a gold mine of information that can be used to predict — or sway — where you spend. Historically, such data has been used mostly for fraud protection.

Suppose you were to treat yourself to lunch on Cyber Monday, the busiest online shopping day of the year. If you order ahead at Chipotle — paying, of course, with your credit card — you might soon find your bank dangling 10% off lunch at Little Caesars. The bank would earn fees from the pizza joint, both for showing the offer and processing the payment.

Wells Fargo began customizing retail offers for individual customers on Nov. 21, joining Chase, Bank of America, PNC, SunTrust and a slew of smaller banks.

Unlike Google or Facebook, which try to infer what you’re interested in buying based on your searches, web visits or likes, “banks have the secret weapon in that they actually know what we spend money on,” said Silvio Tavares of the trade group CardLinx Association, whose members help broker purchase-related offers. “It’s a better predictor of what we’re going to spend on.”

While banks say they’re moving cautiously and being mindful of privacy concerns, it’s not clear that consumers are fully aware of what their banks are up to.