Data privacy has become one of the defining challenges of the digital economy as organizations increasingly rely on consumer data to deliver personalized services, improve products, and generate new revenue opportunities. From online retailers and technology companies to banks and payment providers, businesses collect vast amounts of personal information that can provide valuable insights—but also raises important questions about transparency, security, and consumer trust.
As digital payments continue to grow, financial institutions are uniquely positioned to balance innovation with responsible data stewardship. Consumers consistently rank banks and credit unions among the most trusted organizations to safeguard sensitive financial information, creating an opportunity for institutions to leverage payments data while maintaining the privacy and security customers expect.
Internet companies continue to collect and sell user data and AWS recently productized data sharing within its cloud implementation of AWS Data Exchange. So it’s no surprise this PEW Research Survey finds that a large majority of Americans believe their personal data is collected, sold, and likely misused:
“Data-driven products and services are often marketed with the potential to save users time and money or even lead to better health and well-being. Still, large shares of U.S. adults are not convinced they benefit from this system of widespread data gathering. Some 81% of the public say that the potential risks they face because of data collection by companies outweigh the benefits, and 66% say the same about government data collection. At the same time, a majority of Americans report being concerned about the way their data is being used by companies (79%) or the government (64%). Most also feel they have little or no control over how these entities use their personal information, according to a new survey of U.S. adults by Pew Research Center that explores how Americans feel about the state of privacy in the nation.
Americans’ concerns about digital privacy extend to those who collect, store and use their personal information. Additionally, majorities of the public are not confident that corporations are good stewards of the data they collect. For example, 79% of Americans say they are not too or not at all confident that companies will admit mistakes and take responsibility if they misuse or compromise personal information, and 69% report having this same lack of confidence that firms will use their personal information in ways they will be comfortable with.”
Surveys continue to indicate that Americans trust banks and credit unions relative to security and privacy more than any other business relationship they have. At the same time, financial institutions have an opportunity to generate revenue from the customer data they have. Mercator held a webinar recently called “Transforming Your Payments Data From a Cost Center to a Profit Center” and discussed three methods by which financial institutions can safely utilize customer data to drive revenue.
Why It Matters Today
Consumer expectations around data privacy have only intensified as artificial intelligence, open banking, embedded finance, and real-time payments generate even greater volumes of financial data. At the same time, evolving privacy regulations and growing public awareness have placed increased scrutiny on how organizations collect, share, and monetize customer information.
For financial institutions, payments data has become a strategic asset that can support fraud prevention, personalized financial services, customer engagement, and operational efficiency. However, success depends on using that information responsibly. Institutions that demonstrate strong governance, clear consent practices, and transparent communication are more likely to earn lasting customer trust while unlocking new opportunities to create value from their data assets.
Key Takeaways
- Consumer concerns about data privacy continue to influence trust in digital financial services.
- Financial institutions remain among the most trusted organizations to safeguard sensitive customer information.
- Payments data can generate significant business value when used responsibly and transparently.
- Strong data governance and privacy practices are becoming competitive differentiators.
- Balancing innovation with customer trust is essential as AI and data-driven services continue to expand.
Data privacy will remain a critical priority as financial services become increasingly digital and data-driven. Organizations that successfully combine innovation with strong security, transparency, and responsible governance will be better positioned to strengthen customer relationships and adapt to evolving regulatory and consumer expectations. As the payments industry continues to evolve, maintaining trust through ethical use of customer data will be just as important as developing the next generation of digital financial services.
Overview by Tim Sloane, VP, Payments Innovation at Mercator Advisory Group
