‘Home alone’ online: Digital privacy, engagement, and complex financial decision-making.

Advancements in digital technologies and artificial intelligence offer promising pathways toward supporting people in making better financial decisions. However, these solutions typically rely on consumer data to provide accurate guidance. Consumers’ privacy concerns related to sharing these data may harm consumer engagement, quality of input data, and consumer decisions, posing risks to their effectiveness.

We propose to conduct three studies to investigate the link between digital privacy and consumers’ 1) cognitive, affective, and behavioural engagement, 2) risk perceptions and preferences, 3) feelings of psychological ownership, and 4) behavioural consequences of these perceptions. In study 1, we use ING Bank anonymised customer data to investigate if and how customers’ behaviour changed in response to internal (privacy policy changes) and external (media coverage on privacy in the financial sector) events. In study 2, we conduct an experiment to investigate the causal effect of digital privacy on customer engagement, quality and accuracy of input data, psychological ownership, risk perceptions and preferences, and commitment to goals. For this study, an online budgeting and saving support tool will be developed. In study 3, we use this tool to study objective psychophysiological correlates of consumers’ subjective responses and financial decisions in response to high and low privacy conditions.

This project will make an important societal impact, building better understanding of the link between privacy, consumer experiences, and financial decision making. Specifically, it will help develop real life business solutions that help people make better financial decisions through, rather than at the cost of, digital privacy.