Every Swipe You Take, ​​​​​​​They'll Be Watching You

Banks know a lot about how you spend. Cardlytics wants to use that data to market to you.

- Pat Regnier

Few people can get inside your head—or at least the part of your brain that makes spending decisions—quite like Scott Grimes and Lynne Laube. The co-founders of Cardlytics Inc. deal in some of the most valuable and revealing personal data on the planet: how people use their debit and credit cards. They’re quietly helping some of the largest banks in the U.S. to mine what’s known in the trade as purchase data and use it to encourage customers to buy more things with their plastic.

Conventional banks are trying to raise their data game to fend off fast-growing financial technology startups and hold on to customers. “This is the bank’s secret weapon in the digital wars,” Silvio Tavares, chief executive officer of the trade group CardLinx Association, says of purchase data. But it’s a weapon they have to be extremely careful about using.

Although consumers are constantly being asked to trade some privacy for convenience and service, banks hold a particular position of trust. In early August the Wall Street Journal reported that Facebook Inc. had approached banks and asked them to share data about their customers, to help it create services such as a way to check balances inside a Facebook app. Facebook said it wasn’t using purchase data to push advertising. Several major banks quickly put out statements saying they weren’t sharing data with the social media company.