Privacy
Pfäffikon SZ, Switzerland – Due to the new European regulations (PSD2) banks will soon be obliged to provide requesting third parties with clients’ payment information. However, the account holder must first give its permission. It is an innovative idea which is behind the possible release of your payment information. Fintech is the new buzzword in the financial industry; A fight about your privacy lurking.
Resell
Banks are not allowed to charge fees for the resale of your data. And thus, the bank seem to have been put at a disadvantage initially. Banks are desperately looking for extra income, even though an attractive interest rate provides financial opportunities. On the other hand, there is a proliferation of different FinTech companies. Consequently, the end-consumer is facing a patchwork of new terms and conditions, which is ‘abracadabra’ for the layman. Drawing at the cross is not obvious and blindly trusting the regulator is not an option.
Privacy
In any case, privacy is a delicate subject when you travel the world with your mobile. The mobile phone can do more and more, and this will only increase. The risk factor for accidents is high, and shortly another factor will be added, namely the release of your payment information. To store extremely sensitive information in a binder and to subsequently put it safely in a vault is suddenly not such a crazy idea.
Many FinTech solutions sound like music to one’s ears. The convenience is paramount to many solutions. However, as a bank director, I would be quite unsettled by these developments. After all, the protection of private data has traditionally been one of the core tasks of a bank. In the protection of the clients’ payment information, Switzerland goes a step further regarding legislation, this entirely aside.
Protection
The bank could play an important role in protecting the privacy of its (wealthy) customers. Services in the field of privacy protection are generally expensive, but a bank could make a difference here. Additionally, a bank can offer this kind of services at an affordable rate. The advantage here is that the bank ––in addition to all high-tech gadgets–– could still maintain personal contact with the customer.
The digital revolution is unstoppable, which is an excellent development. Nevertheless, consumers would do wise to protect their privacy consciously. There are enough examples where digital ignorance has caused irreversible reputational damage. The time has come, in the area of privacy, that your bank is going to bake you a special financial bread instead of a standard sliced half-white.
It remains for me to wish you a good weekend.
Jan Dwarshuis is CIO at Thirteen Asset Management AG. Dwarshuis writes his columns in a personal capacity. Professionally, he holds positions in major European, American and Russian stock funds. The information in his columns is not intended as professional investment advice or a recommendation to make certain investments. At the time of writing, he has no position in above mentioned shares and has no intention of doing so in the next 72 hours.
