Improvements in data processing and communications technology now allow more efficient storage, analysis, and rapid dissemination of vast amounts of information. Mergers among companies with the same or diverse lines of business are resulting in companies with the ability to assemble and use large databases of customer information. These developments create new opportunities for banks to use information to custom design products and services to match their customers' needs and preferences. Bank customers benefit from the improved quality of tailor-made goods and services, as well as the increased speed of obtaining financial services. But, while these developments may increase the quantity and quality of many bank services, the expanded use of customer information has also heightened consumer concerns about confidentiality and personal privacy.
Banks have a particular stake in addressing the privacy concerns of customers.
Maintaining customer trust that the relationship will remain confidential is an essential component of banking relationships, and banks continually rely on the willingness of customers to provide extensive confidential information. Survey evidence indicates that much of the public's suspicion and concern about the privacy issue generally derives from a lack of knowledge about how a business handles consumer information. The affiliate information sharing notice mandated by the FCRA can provide a convenient vehicle for banks to educate their customers about their information practices, and gives customers an opportunity to control the flow of their information. A recent survey of consumers indicated that 61 percent of the public believe that it is acceptable for companies to do profile marketing generally. The figure increases to 83 percent with prior notice about information uses and an opportunity to opt-out.