While the pandemic has led to an increased usage of FinTech services, it hasn’t been a perfect growth as consumers continue to suffer from data invasions.
Getting a customer to place their private data — and their money — in your FinTech app requires an incredible amount of trust on their part. For the convenience of being able to use your service, they hand over personally identifiable information such as payment information, financial history, bank account login details, Social Security numbers, and much more. In short, customers hand over the keys to their accounts.
In return, your company will know what the customer spends on or invests in, how much they save or consume, how often they get paid, and any number of variables depending on what type of FinTech service your company provides. And depending on what software is used in your company, that could mean customer data is shared with third-party services in order to score, rate, or rank customers in anything from loan applications to job interviews.
How to fix data privacy
1. Adhere to Security Best Practices
Best practices had better include writing secure code, using encryption, using only authorized APIs, exercising caution in the usage of third-party code libraries, only storing crucial information, and forcing the use of complex passwords or 2-Factor Authentication. The point is: data privacy begins with the first line of code written for an app and extends to how you store and access customer data.
2. Create better collaborations in the Industry
None of this will work without industry stakeholders teaming up to improve both the guidelines and the technical standards governing consumer data access and storage in the financial services vertical. The idea is to build a more secure, more unified experience for the end-user — whether you’re their bank, insurance app, budgeting app, mobile payment service, or blockchain app.
3. Educate Your Users & Give Them Control
From a customer-facing standpoint, there has to be an increased effort to educate users and make them aware of how your FinTech software or app works. In short, tell them how your software or app accesses, collects, stores use, and shares their personal and financial data.
Because for many regular users, financial technology is a mystery. But the fact that they’re using your services means they’re willing to step into your world and use your services, and may want to learn more about it. Use layman’s terms then to teach them about:
• What they should do to keep their accounts safe and secure
• What security you have in place to protect customer data
• What type of data your FinTech software collects
• Whether their data is sold or shared with other companies, and why
• What a user can do to control the collection of data
Customers have pretty straightforward expectations when it comes to data privacy. Basically, they want to be able to control access to their information.
4. Rally for Secure APIs
Within the FinTech industry, there is room for better and more widespread usage of secure APIs (application programming interfaces). In simplest terms, instead of a user logging into his bank account in order to permit a FinTech app to use it for payment, secure APIs could be set up between the bank and the FinTech service allowing a user to control which software or apps can access their bank account. And therefore, no need to let yet another software or app know what your username or password combination is.
But in order for these secure APIs to be created and work seamlessly, you will need a team effort from all involved, which brings us to the last element.