Most of us have heard the phrase, “If you aren’t paying for the product, you are the product,” meaning the company providing the service you’re using is profiting off your data. But what if you’re both paying for the product and your data is being used for profit? That is what Chase’s new Media Solutions business is aiming for.
Chase announced the launch of Chase Media Solutions earlier this week. The new digital media business aims to connect brands with its 80 million customers by way of customers’ transaction data. While this move will provide consumers with personalized offers and cashback opportunities, it also raises concerns about data privacy and consumer consent.
Chase Media Solutions will offer a new stream of revenue for the bank. By leveraging customer transaction history, Chase can offer highly targeted advertising opportunities to brands, generating revenue from both consumers and advertisers. And while consumers are promised some value, such as cashback and personalized offers (if you consider personalized offers valuable), the new launch raises ethical questions about whether banks should be profiting off consumer data in this way. This is especially a concern when, in many cases, consumers are already paying for the bank’s services.
So what is missing from Chase Media Solutions? One of the key issues with the launch that was notably left out of the announcement is availablility of an opt-out option for consumers. Traditional media platforms, such as Facebook, allow users to choose whether to share their data for targeted advertising. Chase, on the other hand, did not mention offering the ability for consumers to opt out of having their data used.
This raises questions about privacy and whether consumers are fully aware of how their data is being used. As the U.S. prepares to enter a new era of open banking, Chase’s stance on who owns customer data becomes clear. By seeking to profit from customer data, the bank is asserting its belief that consumer data ultimately belongs to the bank.
Part of the reason Chase’s launch of a media business is so notable is because it is the first bank to make the move. This begs the question– why haven’t other banks launched similar initiatives? One reason could be the complexity and sensitivity of consumer data. Chase didn’t mention whether it plans to tokenize customer data, but even if it does, using customer data for advertising purposes could be seen as a breach of trust. Additionally, banks may be concerned about drawing attention from regulators, especially in light of increasing scrutiny over data privacy and security. And if you add in the uncertainty around pending open banking regulation, starting a media business like this is a bit risky. The launch of Chase Media Solutions is a bold move.