The benefits of digitisation outnumber the drawbacks, however, one issue that worries and prevents many from adopting new technologies is data privacy and how their data is used. Despite more consumers who are using digital banking and fintech apps on a regular basis to manage their finances wanting greater disclosure and control over their personal financial data, according to The Clearing House (TCH), few know about fintechs’ data collection, management, and sharing practices.
In particular, the 2021 Consumer Survey: Data Privacy and Financial App Usage findings show that more than three-quarters of respondents were largely unaware that fintech apps:
- Commonly use third-party providers to gather users’ financial data (80%).
- Can sell personal data to other parties for marketing, research, and other purposes (76%).
- Retain access to information even after the app is deleted (77%) – Regularly access personal data even when the app is closed or deleted (78%).
- Typically assume no responsibility if a security breach compromises consumer data (80%).
In each of these areas, a majority of consumers also expressed discomfort with fintech app data practices. In fact, majorities reported that they would prefer increased disclosure from fintech apps as well as greater control over their data, including:
- Clear disclosure of what data third parties have access to.
- Clear explanations of possible risks associated with using the app.
- Clear disclosure of what access is granted by apps’ terms and conditions.
- Control over which financial accounts and what kind of data can be accessed by a third party.
- Requiring explicit consent to every third party that seeks to access personal data.
- An ability to set permissions within a fintech app.
The survey also shows that one in three fintech app users have increased their usage since the start of the pandemic, with growing interest in investment services and robo-advisors. Yet, 77% of consumers admit to not reading the lengthy terms and conditions and those who do read them generally report a lack of confidence in their understanding.
“More consumers are using financial apps, but they’re still in the dark about how their data is used, accessed, and stored,” said Ben Isaacson, senior vice president of product strategy at TCH. “Once again, these numbers confirm that people want a better understanding about these practices and they want a greater say in how their personal and financial data are used.”
The poll was conducted as part of TCH’s Connected Banking initiative, an ongoing effort that seeks to enable transmittal of bank-held financial data to fintechs in a more secure way, while improving the customers’ control over their financial data and transparency over the permissioned use of their data.
TCH initially fielded the consumer survey in 2018 and released an update in 2019. Hall & Partners conducted the 2021 survey on behalf of TCH between September 9 and September 27, 2021. The objective was to get a fresh take on what consumers are feeling in 2021 and dive deeper into their perceptions about how fintech apps access, use, store, and share their data. It was conducted online and consisted of a total sample of 4,019 US banking consumers: 2,013 financial app users and 2,006 non-financial app users.