Consumer Credit Data: GLB Act 101
It’s the very definition of a potential catch-22: Financial institutions are legally required to respect and adhere to customers’ opt-out requests, but may not be able to share information across platforms. This also means they cannot control a customer’s profile via those channels as a means of stabilizing data. As a result, customers may become frustrated when their requested actions aren’t carried out and disorganized data causes institutions to struggle.
Many of these difficulties have arisen or been exacerbated as a result of the Gramm-Leach-Bliley (GLB) Act, the provisions of which can sometimes hinder or impair the collection of data. By understanding the purpose and intent of the GLB Act — and how to work with it — institutions can takes steps to organize data for enhanced customer service, more effective marketing campaigns and overall savings in time and money.
How it works
The GLB Act was enacted to help better protect customer data and privacy. Among other things, the GLB Act requires that a customer must be notified when a third party requests information from a financial institution and that the customer also must agree to the exchange of information. This gives customers a chance to opt out of sharing their data before it occurs. This also holds true for nonpublic information, such as a customer’s Social Security number.
A double-edged sword
The GLB Act is designed to protect customers against third-party sharing (multiple platforms within the same institution are considered second and third parties). Therefore, if a customer obtains a mortgage with a lending company and chooses to purchase mortgage insurance through that same company, the insurance platform could be considered a third party.
Of course, this would be fine — save for one thing: Data is dynamic and subject to change.. Sometimes, a manual entry process can corrupt data, such as an administrator typing an address incorrectly. Other times, it’s customer-driven, such as a customer incorrectly changing her last name. Whatever the reason, compliance with GLB requirements can sometimes make it more challenging to identify the same customer across multiple channels, resulting in potential marketing campaign redundancies.
Simplifying data using customer data integration
One possible solution is a Customer Data Integration (CDI) tool that assigns unique keys to customers.. This key is then used to identify the same customer across multiple platforms and portfolios. Once the person is identified, any incorrect data entry or recent customer changes can be cross-referenced between systems to accurately identify an individual based upon the most intelligent data available.
CDI allows institutions to help ensure their compliance with the GLB Act while still organizing their data in the most efficient way possible. It can also mean improved compliance with opt-out requests, improved targeted marketing and increased
Using such a CDI tool, some of the unintended consequences of the GLB Act can be mitigated enabling institutions to offer better customer service while still serving the interests of the company.
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