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Top 5 Data Security and Privacy Considerations for Fintech


Lauren Wilson - September 13, 2018 - 0 comments

Top 5 Data Security and Privacy Considerations for Fintech

In today’s privacy environment, recent high-profile events have made consumer awareness and concern over their personal data higher than ever.  According to a recent survey by The Clearing House, 31% of US Banking customers have at least one fintech app. Nearly all (99%) of these fintech app users are at least somewhat concerned about data privacy. With the proliferation of technology innovation in the banking industry and increases in fintech adoption, it is important for banks and credit unions to understand customer perceptions and preferences to develop strategies and programs to alleviate their concerns.

Here is a summary of the survey’s findings:

Consumers want control over their information:

While 18% of respondents said they would like to leave privacy control decisions to their primary financial institution, the majority preferred to control it themselves. 56% want to control which of their financial accounts and data types can be accessed by third parties and 51% want to be able to provide explicit consent to every third party that seeks to access their data.

Not all information sharing is perceived the same:

Fintech app users surveyed were most comfortable sharing personal information such as e-mail, mobile phone number, address, and date of birth. Users were least comfortable sharing their biometric records and social security number, as well as payment information such as their bank account number, banking username and password, and credit and debit card numbers.

Consumer awareness differs from reality:

While nearly 65% of the survey respondents said they can control access to their data for some of the apps they used, most had incorrect perceptions on how their data was able to be used. After learning more about some common industry terms and conditions, 47% of fintech users said that they were now less likely to use the services.

Expectations for data privacy control mechanisms are reasonable:

Despite a high level of concern, consumer expectations for control mechanisms to manage their data is reasonable. The majority are looking for clear permission dashboards. 50% suggested this within their primary bank and 47% within non-bank financial applications. Only 29% preferred a personal interaction with a customer service representative at their primary bank.

Consumers expect their primary financial institution to protect their personal data:

In a 2017 survey by A.T. Kearney US Banking, consumers indicated that they think most highly of their banks ability to protect their data (68%) versus financial information aggregators (21%). In The Clearing House survey, both fintech and non-fintech users expect their bank to safeguard their data at a similar level. For fintech users, 51% look to their banks for leadership in data security with only 34% looking to non-bank financial applications. While perceptions of data security leadership are not aligned between banks and non-bank financial applications, nearly half of respondents believe both should provide education and awareness on both access and usage of personal and financial data.

 

In Facebook CEO Mark Zuckerberg’s April 2018 Congress Testimony, Senator John Thune said: “this should be a wake-up call for the tech community…. We’re listening, America is listening, and quite possibly the world is listening too.” Consumers are looking for leadership and the pressure is on rise to the challenge. To address these concerns, the Clearing House recommends the following:  

  1. further efforts to expand consumer awareness
  2. drive greater collaboration among industry stakeholders on principles, guidelines, and technical standards
  3. broader use of secure application programming interfaces (APIs)

Do you agree? Share your thoughts by getting in touch.

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