Chase Bank

Chase Bank Uses Financial History for Targeted Advertisements

Background

"Chase is the U.S. consumer and commercial banking business of JPMorgan Chase & Co. (NYSE: JPM), a leading financial services firm based in the United States with assets of $3.9 trillion and operations worldwide. Chase serves nearly 80 million consumers and nearly 6 million small businesses, with a broad range of financial services, including personal banking, credit cards, mortgages, auto financing, investment advice, small business loans and payment processing. Customers can choose how and where they want to bank: More than 4,700 branches in 48 states and the District of Columbia, more than 15,000 ATMs, mobile, online and by phone."

As a leading financial services firm, Chase Bank needs to be held to the highest standards. However, in this incident Chase Bank has failed to meet those standards, by letting advertisers tap into customers' private spending data for targeted advertisements.

Chase Media Solutions Incident

Following the acquisition of Figg, a card-linked marketing platform, in 2022, Chase launched "Chase Media Solutions" on April 3rd, 2024. This platform was marketed as a new digital media business that would provide brands with direct access to Chase's 80 million customers. The service was sold to investors as a new frontier of advertising, based on claims that partner companies would have the ability to use Chase's first-party transaction data to target deals and advertisements to customers based on their purchase history.

Implementation

The program operates through several key mechanisms:

• Chase uses its "owned transaction data" to allow brands to target customers based on their spending patterns
• Advertisers can specifically target new, lapsed, or loyal customers
• Targeted offers appear directly in customers' Chase mobile app and website
• The bank charges merchants a fee when customers use deals from the platform
• Chase claims to keep customer data within their "highly secure environment" while still allowing precise targeting

Pilot Program Results

To test the service, Chase worked with several major brands:

• Air Canada
• Solo Stove
• Blue Bottle
• Whataburger

During the initial pilot, Air Canada reported a lot of success, with their campaign exceeding expectations through two offer structures that drove considerable revenue & awareness among Chase cardmembers.

Chase's Defense

Chase has attempted to justify the program through several claims:

• The bank maintains that customer data remains within their secure environment
• They state they do not share personally identifiable information with brands
• The company frames the program as a benefit to customers through cashback offers and personalized deals
• Chase emphasizes their status as a "highly regulated company" as a defense for their data practices

Reception

This decision has come with significant consumer backlash, with multiple concerns raised:

• Customers complain there is no way to opt out of their data being used for these purposes
• Privacy advocates express concern about the bank monetizing personal financial data
• Critics argue this represents a violation of consumer privacy and shows the bank's lack of transparency
• Social media responses indicate customer discomfort with the program
• Users question whether their banking data should be used for advertising purposes

Broader Implications

This incident represents several concerning trends in modern consumer exploitation:

Data Privacy Issues

• Large corporations mask their data collection agreements in lengthy privacy policies
• Financial institutions leverage their unique access to sensitive customer data
• Companies provide no way or no easy way to opt out of data collection
• Personal financial information is being monetized without clear consumer consent

Consumer Rights Concerns

• Customers lose control over how their transaction data is used
• The program was implemented without clear opt-out mechanisms
• Existing customers are affected by significant changes to data usage policies without meaningful communication commensurate with the severity of the policy change & invasion of privacy
• The practice represents a shift in how financial institutions monetize customer information

Industry Implications

• Sets a precedent for other financial institutions to monetize customer data - if one of the world's largest banks can do it, it encourages copycats
• Blurs the line between banking services & advertising platforms
• Raises questions about the proper use of financial transaction data
• Demonstrates how "legal" practices can still violate consumer privacy expectations