Author: David Webber
Targeting, data sharing and how to combat the privacy concerns these present
Businesses are using location data to improve service more than ever before. However, in doing so, many privacy organisations have expressed concerns about how many apps, services and companies have access to location data.
New privacy options
To help combat privacy concerns, Apple introduced new privacy options for location data with iOS 8. Now users can choose between “always”, “while using”, which tracks users’ locations only when an app is being used, and “never”. This gives users more specific and flexible control over when apps can and cannot use their location.
How do you feel about data sharing?
However, contrary to recent reports in the media around consumer sensitivity to data sharing, our most recent research shows young people aren’t too concerned about organisations using their location data, so long as it’s used to provide them with a better service. 60% of millennials – people aged between 18 and 35 – are happy for apps to use location data to send them exclusive location-specific offers, such as double reward points or discounts in nearby shops. Conversely, just 34% of Generation X – people currently aged between 35 and 55 – feel the same way.
Financial services use of location data
This presents financial services providers with a tremendous opportunity. Location data can help improve targeting, enabling financial services providers to send offers and promote services that are relevant to specific locations. For example, they could use location data to identify when customers are in an airport, and then send them an offer on travel insurance.
Precise location targeting
As well as this broader location-based targeting, iBeacons, Apple’s Bluetooth Low Energy (BLE) technology, enable companies to determine users’ locations to within a few metres. Knowing a customer’s precise location holds significant benefits for financial services providers, who can use the service to differentiate their level of service. For example, identifying when a high worth customer enters the branch, or when a customer arrives to discuss a specific product like a mortgage. Our research shows that 54% of millennials are happy for their bank to use location data on their smartphone to recognise when they enter a branch to offer better tailored services.
However, location data isn’t just useful for targeting promotional offers and improving in-branch services. It can also be used for authentication methods. Financial services providers can use location data to show where the customer is when they’re purchasing an item. By locating the customer at the point of purchase, financial services providers can help reduce card-present fraud and increase customer security.
Adding value to customers – the upside of location data?
Our research shows that if location data is used to improve financial services, younger customers are happy to share their data. However, there’s a thin line for financial services providers to tread here – financial services providers need to ensure they don’t annoy their customers with untargeted offers. The industry winners will be those that use technology to add value to customers’ lives.
Would you be happy to share you location data with your financial services provider?