Consumers Look to Credit Unions, Banks for Fintech Data Protection, Survey Finds
Credit unions and banks may find themselves in the crosshairs if fintech providers go too far with data-sharing.
Many consumers are using fintech apps to manage and invest their money, but new research from New York-based payment-systems provider The Clearing House has found that most consumers are worried about who’s seeing their data, want more control over it and expect their credit unions or banks to take the lead in protecting that data.
The survey of more than 2,000 U.S. banking consumers found that about one-third have used at least one fintech app in the past year, but 89% are concerned about data privacy and data-sharing. About half said they are uncomfortable sharing payment and financial information with the apps.
“Most fintech app users believe they understand and can control how their data is accessed, collected, used and shared by third parties. But consumers’ actual awareness of fintech data aggregation practices is often less,” the study said. “For example, after being told that many fintechs, as part of their terms and conditions, gain consent from consumers to use their data for purposes other than operating the app itself, nearly half of fintech users (47%) said they are now less likely to use these services.”
Most respondents (56%) said they want to choose what data third parties can access, and 51% said they would like to provide explicit consent to every third party that seeks to access their data.
“Consumers have the greatest concern about sharing their bank account username and password and are least worried about fintech apps accessing their investment information and history. When it comes to more sensitive personally identifiable information, such as Social Security numbers and biometric records, around 60% of fintech users are not comfortable sharing their data with fintech apps,” the study said.
The Clearing House study also found that 22% of respondents thought their data was accessible until they close their apps; another 24% believed their data was accessible until they revoked their login credentials. A quarter said they believed their information was always accessible.
“While the duration of data access may vary based on the individual fintech app’s terms and conditions, fintechs typically can access information so long as they have the user’s valid log-in credentials,” The Clearing House noted.
“The pattern repeats itself when it comes to how fintech apps share user data with other third parties. Many of these apps, as part of their terms and conditions, gain consent from their users to access, collect and use their personal and financial data for purposes other than the consumer’s use of the app. Yet fewer than two in five fintech users (39%) said that they think the apps they use sell their data to third parties,” it added.
Credit unions and banks may find themselves in the crosshairs if fintech providers go too far, the study warned. More than half (56%) of the respondents who used fintech apps said they held their primary financial institutions responsible for the security of their data. Only about a third (34%) of the respondents said they look to non-bank financial applications to exercise leadership in this area.