What can be a direct effect of complying with privacy laws?

Complying with privacy laws can significantly enhance customer trust and loyalty. When a bank adheres to regulations designed to protect customer information, it demonstrates a commitment to safeguarding clients' personal and financial data. This transparency fosters a sense of security, encouraging customers to feel more confident in their relationship with the bank. As customers become aware that the institution respects their privacy and implements measures to protect their information, they are more likely to develop a lasting trust in the organization, which can lead to increased customer retention and loyalty.

The other choices reflect aspects that might not necessarily stem directly from compliance with privacy regulations. For instance, while lower marketing costs could be a potential indirect result of a strong reputation, it is not a direct effect of privacy law compliance. Increased overhead expenses or more complex operational procedures could result from the implementation of compliance measures, but these are generally viewed as the challenges of maintaining compliance rather than benefits that enhance customer relationships.