Data Security and data privacy gets used interchangeably, often. But there are some discrete differences: Data Security protects the data from getting compromised by external attackers and insiders. Data Privacy looks at how data is collected, shared, and used.
Amidst the wake of recent data breaches worldwide, the data privacy debate has now taken greater significance and assumed to the center stage in the day-to-day world, more so in the financial services industry given the large amounts of personal data processed by banks and financial services organizations and also their third party IT solution providers. The customer onboarding procedure in a bank requires capturing personal information for identification, and this can include sharing non-financial data such as names
, addresses, contact, and social security numbers to sharing financial data in the form of savings, bank account details.
Importance of Data Security
There are two main reasons for which data privacy is one of the important issues in our industry.
Data is one of the most important assets a company or a brand has. With the onset of the data economy, companies find great worth in collecting, sharing, and using data. Companies like Google, Facebook, and Amazon have their businesses built on the data economy.
Transparency in how businesses ask for consent, follow their privacy policies and manage the data they’ve collected is vital in building trust and accountability with customers who expect privacy.
Secondly, privacy is the right of an individual to be free from uninvited intruders, to exist safely in one’s space, and freely express their opinions behind closed doors are important for living in a democratic society.
Upcoming Trends in Data Privacy in the Face of Evolving Threats
As seen in the above section, the banking industry is one of the main data breach targets due to the perceived value of the data lying beneath. Banks need to be flexible in sharing customer data, to capitalize on emerging growth opportunities, and is, therefore, critical that they find a balance between how flexible data sharing can be while also taking care of its privacy.
There is a paradigm shift in the way banking is being carried out, globally. Increasingly, banks are transferring from an ownership structure to a cloud infrastructure. In the channels arena, the initial process is being regulated directly by the customer, with appropriate security features.
There is a visible transformation in the banking environment, with the banks, using their front offices for conducting sales promotion, cross-selling, and customer service.