What is Bank Privacy?

Bank privacy is a family of policies which are designed to protect the privacy of bank customers. Many nations have laws which set out minimum standards for bank privacy, in the interests of protecting their citizens. Individual banks tend to have their own privacy policies. When customers join a bank, they will be given information about the bank's approach to privacy, and they will also be sent updates whenever the bank changes its privacy practices.

Financial records are sensitive. Customers of a bank have a reasonable expectation of privacy including the expectation that personal identifying information, information about accounts, and information about safe deposit boxes will not be released. Banks, for example, will not share the government identification numbers of their customers, and will not release records about financial activity without a subpoena.

Bank privacy also extends to things like addresses, phone numbers, email addresses, and other contact information. When reading a bank's privacy policy, it is a good idea to find out how much information the bank shares with partners. Bank customers are sometimes disturbed to find out, for example, that banks will sell information about buying trends to companies which send solicitations. Usually the privacy policy includes an opt-out which allows customers to limit the release of their information to that which might be required by law.

Privacy also limits the circumstances in which information can be released. Over the phone, for example, someone is usually required to give an identifying code to get information about account balances. This is designed to protect the privacy of bank customers by setting up a layer of security between the bank and the public. Online banking also uses a variety of privacy techniques including encryption to protect its data and prevent things like unauthorized transfers. Bank privacy is an especially pressing concern in the Internet era because of the speed at which fraud can take place.

Some nations are famous for their bank privacy, and have become havens for “offshore banking,” in which citizens of other nations attempt to hide assets. These banks may offer complete privacy such as numbered accounts which conceal identity, and will not release banking information to other governments. However, several privacy havens have come under attack for their practices, leading to shifts in their approach to privacy which allow nations like the United States to go after rogue taxpayers who attempt to shield their assets offshore.