Talking to clients about data security

May 21, 2018 by Andy Penkalski

about the author:

Andy Penkalski

Marketing manager

Andy oversees all automated marketing initiatives. He is interested in always discovering new tools for brands and businesses to more effectively reach their audience and improve metrics for success within their own organization.

Regardless of the demographic, every investor is likely more attuned to data security issues in the wake of numerous current events. The European Union is about to enact a far-reaching tightening of data gathering regulations with the General Data Protection Regulation (GDPR) set to take effect on May 25. The regulation enforces some of the strictest protocols on digital identifiers that the world has ever seen. Data footprints like IP addresses and cookies – quasi-anonymous pieces of information that have long been relied upon to enhance marketing and activity tracking – will only be accessible to corporations by obtaining explicit opt-ins from any prospect or customer. 

While Europe seeks to set historic consumer protections on data gathering, the United States may seem like the Wild West in comparison. While US businesses that capture data or conduct business with European markets are obligated to adhere to new compliance standards, the tactics stymied by the GDPR are the exact data points that have allowed 21st-century business intelligence to become so tailored and targeted. Similarly, recent scandals at monolithic corporations like Facebook and Equifax likely have US consumers wondering who is looking out for them. As financial professionals rely on digital tools to remain competitive, clients will likely have more questions about the always-online tools that host their most personal information. Thankfully, there are plenty of proactive assurances that you can provide to your clients to maximize confidence in your technology.

Facebook is not comparable to FinTech

Many people have been rightfully outraged at the fast-and-loose activities Facebook has carried out in regards to data security, but it should not be surprising considering their business model. Simply put, Facebook monetized their business by selling user data. Their value as a company primarily rests in its ability to function as one of the largest, most hyper-focused advertising and market research platforms in the world. Because their information repositories are inherently made accessible to outside organizations, vulnerabilities are unavoidable. 

This is in no way, shape, or form how the overwhelming majority of FinTech vendors provide value to their customers. As an ISO/IEC 27001 compliant company, data security is paramount to Advicent as an organization, and the same likely goes for any financial advisor. There is zero incentive for our business models to exchange data in the same fashion that media platforms like Facebook – or even credit bureaus – conduct themselves. Emphasizing to nervous clients that the stricter compliance certifications that your technology maintains along with the drastic difference in vulnerability scope should quell security fears.

The GDPR will have a rippling effect

As mentioned, U.S. companies that conduct business in Europe are required to adhere to GDPR standards all the same. According to the US-based Consumer Action group, this will encourage a ripple effect of regulatory adoption in the US over time. Over the past few months, it has been easy to notice most large web properties rolling out updated privacy policies. These are all in wake of the GDPR because it is safer to ensure compliance across every global web property than to gamble on only covering localized domains. 

The same is taking place amongst FinTech vendors. Advicent services the Dutch market through our European financial planning software, Figlo. That means our internal teams have been working diligently to ensure compliance and tightened security not only in the Netherlands but also in the United States and Canada. In addition to the previously mentioned data security certificates that Advicent and other FinTech vendors maintain, reminding your clients of the global shifts taking place and the proactive steps your vendors are taking can provide assurance that their data is safe. 

If you're interested in learning more about Advicent data security and compliance, you can read about our security certificates on the NaviPlan product page by clicking here.