New Technologies Must Guarantee Data Privacy and Ethical Practices
The increasing use of digital payments means that financial institutions need to take measures to guarantee consumer rights regarding privacy and ethical use of data
Taking a comprehensive approach to risk management, GDS Modellica guarantees the privacy and ethical use of customer data
The digital revolution has completely changed our habits and the way we interact with one another. Technology has transformed the world at an incredible speed, and this shows no signs of slowing down. However, it is important to remember that users and potential customers are still people, not machines. Access to financial services has greatly improved as certain physical obstacles have been removed, and banks are now offering increasingly more-personalised services that promise to generate greater profits. However, with many people now managing their finances online, banks need to implement the necessary safeguards to protect consumer rights. There is nothing inherently bad about technology, but it needs to be used correctly if it is to safely help customers manage their transactions and services.
Furthermore, in this increasingly digital and fast-paced world, financial companies need to behave ethically and comply with regulations if they are to ensure customer security and privacy. Data protection is absolutely fundamental. Banking data is personal data; it is economic, financial and insurance data. Therefore, banks and financial institutions that handle such data need to comply with the GDPR and other legislation to guarantee customer protection and ensure that their data is not subject to unauthorised access.
Data privacy is a crucial matter for the banking industry. Customers sit at the centre of everything, and their personal data has to be used legally and ethically if companies want to offer efficient, agile and secure services.
As a result, in order to comply with legislation, financial institutions need to follow certain protocols and checks depending on the customer and the service in question. This means correctly identifying the customer, whether they are a physical or legal person, and then verifying the legal origin of their money. Furthermore, many banking services offered online are hosted on websites that comply with security and encryption requirements in order to protect customer bank account data. These same websites also include the text and information required by legislation on data protection and the online sale of products and services.
Provided that customers authorise them to do so, fintech companies and banks can use this data to offer easier and more inclusive access to credit, personal finance management, digital wallets and payment services. All of this requires data confidentiality between fintechs and other financial organisations so as to protect customer data from unauthorised third parties and comply with their legal obligations. This confidentiality is guaranteed for everyone, whether they are physical or legal persons. Financial institutions have the ethical duty to protect customer data and ensure their privacy, and this, in turn, generates trust. Technology is a way of doing this, but it needs to be ethical and comply with legislation, and any use of technology must not violate individual security or freedoms.
According to Antonio García Rouco, managing director at GDS Modellica, “as digitalisation continues, the need to protect personal data remains the same. Financial institutions need to adapt to new ways of assessing risk and tailor their approach to decision-making depending on the social context and credit needs. In our work focused on credit management, we ensure compliance and guarantee privacy, security and proper governance of data. Complying with legislation, ethical practices and data protection measures are vital when it comes to preventing and mitigating risk”.