Sharing location with bank seems creepy, but it’s useful

Customers need to weigh benefits vs. perceived cost.

If you’re traveling for the holidays, you might have to let your bank know where you’re headed.

But this year, rather than call and set a travel alert, your bank may want you to do something a little different. Banks are increasingly asking you to share your location through your smartphone.

That might seem creepy, even for an institution you trust. Do you really want to let your bank track you?

Ultimately, sharing your location with your bank is an exchange of value. You need to decide if the benefits outweigh the perceived cost of what you’re giving up.

There is perhaps no better case for letting your bank know where you are than fraud protection. By sharing your location with your banking app, the bank can sync where your phone is with where your card is. When an unauthorized charge is made in a location different from the one you’re sharing, the bank can automatically detect it and decline the charge.

U.S. Bank is one of the more progressive banks using geolocation in this way. Recently, it rolled out location-based monitoring for all of its debit and credit cards, said Dominic Venturo, chief innovation officer at the Minneapolis-based bank.

If you’re concerned that the bank is tracking your every move, don’t be, Venturo said. The app is recording only your general location, he said.

“It’s not a (record) of all the places you’ve been. It is where you are relative to cell towers,” Venturo said.

Credit Human Federal Credit Union in San Antonio, Texas, allows its members various types of card controls through a separate app, including location-based restrictions. For example, users can set their cards to be accepted only within a mile radius of their phones.

“Any transactions outside of that range are automatically declined,” said Adele Glenn of Credit Human. “It’s a great fraud deterrent and also gives members peace of mind.”

When you’re about to swipe your card for tapas in Barcelona, how does the bank know it’s you and not a Catalonian credit card thief ? One way is to tell your bank ahead of time that you’ll be traveling.

Most banks suggest you set up a travel alert by contacting the bank so that your purchases in a city you’re visiting aren’t declined. But that involves work; ostensibly, it’s easier to share your location with your banking app and let your bank do the work in the background.

To make the experience seamless, Venturo said, it works best when you share your location always, rather than just when you’re using the app. If you have to pull out your phone, open your app and let it gather your location, you might as well have put a travel notice on your account.

But Venturo understands the trepidation. If customers are uncomfortable, they can always turn off the tracking and tell the bank when they are traveling. In general, privacy experts say that if there is anything you’re going to trust with your location data, it’s where you keep your checking or savings accounts.

“Banks are pretty trustworthy on the scheme of things,” said Bruce Schneier, a fellow at Harvard University. “Next to Uber, they are gods.”