Fintech businesses are fast gaining popularity, with an increasing number of consumers turning to them when facing financial hardships. By 2026, the global fintech sector is expected to reach $324 billion in revenue. Between 2022 and 2027, it will expand at a compound annual rate of around 25.18%.
This prediction of skyrocketing growth demonstrates how important fintech firms are for many borrowers today. However, these businesses constantly search for new technologies to protect their customers’ information.
This article intends to enlighten you on why privacy is becoming increasingly important in the fintech space.
What is Data Privacy?
Data privacy is the level at which people can access, utilise, and share data. In this digital age, information can be used in many wrong ways that may hurt others.
Fortunately, consumers are increasingly becoming aware of their privacy rights. Therefore, every business must make efforts to prevent data loss or risk privacy breaches that will hurt their finances and image.
Reasons Why Fintech Firms Must Prioritize Privacy
Protecting Data Builds Trust
Customers are concerned about their privacy, especially concerning their financial data, and will always take steps to secure it. Fintech firms lose customers whenever their information system is compromised, and about 40% of the clients never return to the same firm after the breach.
Customer confidence in a Fintech firm may be boosted if the firm exhibits excellent privacy procedures. For example, a company should consider privacy issues at each stage of their product development, be transparent about how they use consumer data, and promote the extra precautions they take to safeguard personal information.
To Keep Up With the Changing Regulations
Compliance with legislation is critical for fintech companies to prioritise their data privacy. Fintech businesses, like other financial organisations, have long been subject to strict supervision. They must guarantee that all client information is safe and secure.
Protecting Customer Data
Customers’ personal information is another crucial reason fintech must be concerned about the safety of their information system.
Regulatory bodies require financial institutions to guarantee the safety of consumer information from external hackers and websites.
Moreover, the Fintech firms must guarantee that they’ll not unlawful access, misuse, and disclose their customers’ information.
For example, loan matching services like Viva Payday Loans have been reputable for keeping their clients’ details safe.
Safeguarding the Company From Liability
In case of a data breach, a fintech business may be held accountable for the damages or losses incurred because it failed to adopt adequate security measures. This may hurt the firm finances and reputation, or worse, get their licenses revoked by the government.
Competing With Other Fintech Companies
The fintech industry is highly competitive, and organisations must do everything to have an edge over competitors. One way to achieve this is by providing the highest levels of privacy and security. Furthermore, this may be the defining element in their tale of accomplishment.
To Attract New Customers
Like all businesses, new clients are essential for fintech firms’ growth. This may be accomplished, in part, by providing a higher level of data privacy and security.
Customers will feel more comfortable working with a business that can safeguard their information and be more willing to refer their friends and family.
For example, payday loans online at vivapaydayloans.com.au, a loan matching service has grown its reputation by safeguarding the privacy of the customers by linking them to reputable online lenders without breaching their privacy.
Retaining Current Customers
To keep current consumers, fintech businesses must continue guaranteeing the safety of their details. Customers will most likely seek to do business with other firms if the firm misuses their data or if security breaches occur.
Preparing for the Future
The fintech sector is constantly changing, and businesses in this space must plan for the future. Unfortunately, fraudsters are planning for the future and improving their activities to remain ahead of the game.
So, one method to combat this is by Fintech companies constantly improving their services and data security levels. This helps create client trust and ensures that the organisation is equipped to deal with future challenges.
Fintech has grown in popularity, particularly in Australia, as the number of Aussies seeking their service is growing daily. Most consumers are even willing to transfer banks if their present financial institution cannot integrate with a popular Fintech platform. However, this industry faces many challenges in protecting its information from self-minded hackers and organisations.