Royal Bank Of Canada Puts A Value On PrivacyRoyal Bank Of Canada Puts A Value On Privacy

What's privacy worth? To the Royal Bank of Canada, it's $630 million.

The bank takes the position that giving customers the level of privacy they want is a competitive differentiator. "Information is really the currency of the relationship with our customers, and trust is a key part of that relationship," says Peter Cullen, the bank's chief privacy officer.

True enough -- but money talks. That's why the bank has tried to put a price on privacy's value, something most companies dismiss as an immeasurable intangible. The bank starts with $26.2 billion (the bank, of course, uses Canadian dollars, but we've converted to U.S. dollars), which is the overall shareholder value of the bank. It uses a proprietary formula to calculate that value, but companies can simply use market capitalization. The consumer and retail portion of that is $9.0 billion.

Each year, the bank surveys customers about the importance of branch services, customer service, and more than a dozen other items. It added privacy to the list about six years ago, and it ranks in the middle of what consumers consider valuable. Based on the survey results, the bank figures that privacy drives 7% of the demand for its products and services. That means 7% of the $9.0 billion shareholder value of the bank's consumer business: $630 million.

Illustration by Richard Borge.

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