To the Editor:

As a regular reader of American Banker I look to your publication as my primary source of unbiased information and presentation of issues pertaining to the industry. I was particularly struck by Michelle Heller's June 26 article "Cost of Compliance Could Deter Data-Sharing."

Uncertainty over regulatory compliance, along with Bank of America's announcement that it will never share consumer information, have brought data-sharing to the forefront of issues facing financial institutions, and may cause an unfortunate rush to judgment. New technology and processes are coming of age and creating new paradigms that could significantly benefit consumers while preserving their privacy.

Financial institutions should evaluate the new opportunities carefully before closing the door on potential benefits to their customers and themselves.

Traditionally, financial institutions have sold identifiable, private information to third parties that wanted to market products directly to the consumers. This invaded consumers' privacy while creating limited benefits for them.

There are other options that provide value-added service to consumers while maintaining their anonymity. For example, my company, Zingbill Inc., has developed an anonymous, reverse bill auction system that facilitates data-sharing in such way that guards consumer privacy while directly benefiting the consumer.

While paying bills online, consumers can opt into the system and allow billers such as phone, wireless, and utility companies, to view anonymous profiles containing rate and usage data. The billers can make offers based on the anonymous profiles. When paying their bills online, consumers can view and select competing offers for their business, thereby lowering their bills.

In essence, options such as this capture the value of a consumer's identity and let the consumer control and exploit that value.

Financial institutions that categorically refuse, on the basis of their conceptions of traditional data-sharing, to share information may lose the opportunity to help their customers manage their bills and save money. Such institutions also will miss the single most powerful incentive for consumers to utilize electronic bill payment and online banking, the adoption of which increases customer loyalty by 50% on average.

Finally, institutions rushing to judgment are forgoing a powerful new fee source, which, unlike most sources, is not born by the institution's own customers.

In the end, a rush to judgment and overly broad policies may carry significant opportunity costs for financial institutions, and consumers may pay with higher bills and ever-increasing direct marketing invasions of their privacy.

I feel it is important for bankers to understand all of their options so that they can make decisions based on their, and more importantly, their customers' best interests.

John Teer
Chief executive officer
Zingbill Inc.
Durham, N.C.

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