Banks already have the data. So what?
Few
industries sit on richer customer data than banking. Transaction histories,
credit behaviour, income patterns and location signals are a goldmine that
other organizations dream of having. The ability to see what customers do,
often in near real time, is already there.
So when the
subject of zero-party data enters the conversation, it can feel redundant. It’s
easy to see it as just another label for something banks already have – but
that misses the point.
Zero-party data is about intent
Where most
banking data is “observed”, zero-party data is “declared”. It is the
information customers choose to share, deliberately and proactively. Their preferences,
context and intentions are not inferred from behaviour but stated in their own
terms. That difference matters more than it sounds.
A
transaction can tell you what was purchased. It cannot reliably tell you why.
Was that airline ticket a holiday, a family emergency, or a one-off expense? Is
a spike in spending a lifestyle change or a temporary situation?
Banks are
exceptionally good at pattern recognition, less so at interpretation. This is
where zero-party data starts to earn its place.
Where does zero-party data fit in banking?
In practice,
banks are already using it, often without calling it that. When a customer sets
a savings goal in a mobile app, declares their investment preferences, or
indicates travel plans, they are providing explicit signals that go beyond
transaction data. These inputs sit alongside behavioural data, adding context
that cannot be inferred.
Some
institutions are starting to make this more deliberate. Many banks are
experimenting with ways to invite customers to describe their own financial
behaviors and priorities, rather than relying solely on analytics.
The UK bank first
direct offers a
simple example. It introduced a “Money Type” quiz that lets customers characterize their
approach to spending and saving in their own words, returning tailored insights
and guidance in exchange. It is not a large-scale transformation, but it
reflects a shift in mindset. Data is not just captured. It is volunteered.
True understanding fosters true
personalization
These
are small interventions, but they point to a bigger change. It fills in the
meaning behind the movement. It turns signals into understanding and, in doing
so, it changes the quality of decisions that follow.
In product
design, it sharpens relevance. Knowing a customer is “interested in travel” is
useful. Knowing they are planning a trip in the next three months is
actionable.
In
marketing, it reduces friction. Customers do not disengage because banks
communicate. They disengage because the communication feels off, poorly timed,
poorly targeted and repetitive. Zero-party data gives customers a way to
correct that, directly.
And in
customer experience, it introduces something banks often struggle to
demonstrate at scale: listening. This is where the comparison with existing
data becomes clearer. Banks already know what customers do. Zero-party data is
how they learn what customers mean.
How should banks collect that data?
Many
early efforts have focused on onboarding questions, preference centres, or
occasional surveys. Some are beginning to link data sharing to engagement,
using quizzes, prompts, or reward-based mechanics to encourage participation.
But the risk
is treating zero-party data as another extraction exercise.
The more
effective models flip that dynamic. The Duolingo “Year in Review” is a useful
reference point, not because of the sector, but because of the design. It did
not ask users for more data in isolation. It returned something of value, in a
format people wanted to keep and share. When the exchange is that clear,
participation follows.
The lesson
for banks is straightforward: ask for small inputs, at the right moment. Make
the benefit immediate and visible and ensure what is shared is used.
This is
where many organisations still fall short. Across the industry, zero-party data
is often fragmented – collected in onboarding, held in marketing systems, or
captured in isolated interactions, but not consistently reflected in the next
customer experience. Even where it exists, it is not always activated.
There is
also a more structural role emerging. As privacy expectations tighten, the
difference between inferred and explicitly shared data becomes more important.
Zero-party data is permissioned by design. It reflects not just what customers
do, but what they are comfortable with.
In that
sense, it is not just a marketing tool. It is part of the bank’s trust
infrastructure. Handled well, it reduces guesswork. It limits unnecessary
outreach. It respects boundaries that are otherwise invisible in transactional
data. Handled poorly, it becomes just another unused dataset, or worse, a
broken promise.
Banks do not
need more data for the sake of it. They need better signals, clearer intent and
stronger alignment between what customers say and what the bank does next.
Zero-party
data will not replace the depth of insight banks already have, but it can make
that insight smarter, more precise, and more human and that is where its real
value lies.
About
Author:
Beth McCoy, CEO of CORA Loyalty
Beth McCoy, CEO of CORA Loyalty