Examining customer privacy concerns in dealings with financial institutions

Abstract

Purpose – This paper aims to develop a customer typology based on consumer attitude towards information privacy and examine the driving factors of privacy concern. Design/methodology/approach – A sample of 456 Australian consumers who have applied for a credit card or mortgage is used in this study. Consumer concern with privacy statements, the privacy legislation at the federal level, trust and the willingness to disclose personal information for some form of compensation are used as drivers of consumer privacy in regression analysis. These variables are used in cluster analysis in order to segment financial consumers. Findings – The results indicate that that the level of privacy concern is primarily driven by trust that far outweighs any concerns with privacy statements and the provision of nationally legislated safeguards. Furthermore, a cluster analysis reveals three distinctive customer segments in the domain of financial services: the pragmatist, indifferent, and competent. Originality/value – This study is undertaken to advance our knowledge on consumer privacy concerns in the context of financial services and to segment financial services customers in relation to the disclosure of personal information. The study contributes to the literature and enhances our understanding not only on drivers of consumer privacy but also on specific areas of privacy concern among various customer segments.