ING Plan to Share Customer Payment Data Spurs Privacy Concerns

A debate over banking privacy erupted in the Netherlands after ING Groep NV’s Dutch lender revealed plans to share customers’ debit card data with companies competing for their business.

The bank wants to offer customers the option of receiving discounts from companies based on their spending patterns as revealed through data analysis, Hans Hagenaars, a director of the Dutch unit of Amsterdam-based ING, said in an interview on Dutch radio broadcaster NOS today.

ING, which has issued about 8.6 million Dutch debit cards, will invite about 1,000 account holders to take part in a trial run of the service later this year, he said. ING, the second-biggest Dutch savings bank, was the first Dutch lender to announce its intentions to use the data.

“If, for example, you spend a couple hundred euros each year at garden center A, it could be very attractive for garden center B to offer you a discount on your next purchase,” Hagenaars said. “And what goes for garden centers, also applies to a telecommunications provider, energy companies and supermarkets.”

His comments prompted an immediate outcry. Hundreds of people on Twitter voiced alarm at what they described as an invasion of their privacy. Dutch lawmakers, including members of the governing Liberal Party and Labor Party, urged Finance Minister Jeroen Dijsselbloem to clarify whether the plan would violate the country’s data protection laws.

The Dutch privacy watchdog joined in. Banks should show utmost restraint in profiling their customers in such a far-reaching manner, Data Protection Authority Deputy Chairman Wilbert Tomesen said in an interview with broadcaster NOS.

Privacy Rules

Under a code of conduct adopted in 2010, Dutch banks can only collect customer data for specific and clearly defined purposes.

“Financial data say everything about what we do, whether it’s about our sports club, what we buy, our social life, health or political preferences,” Tomesen said. “That is much more than something seemingly innocent like buying flowers at a garden center in March.”

Dutch newspaper Het Financieele Dagblad was first to report the news, citing an interview with Hagenaars.

ING said in a statement on its website it will comply with all privacy requirements and that it will ask explicit consent from customers. The lender also said it won’t sell data to third parties and that all customer information will remain with ING.

“It’s not about making money,” ING’s Hagenaars told NOS. “We’ll have to see about that after the test. Our primary aim is to help customers’ save money, which we expect will lead to higher customer satisfaction.”

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