[Skip to content]

Sign up for our daily newsletter
The Actuary The magazine of the Institute & Faculty of Actuaries

A third of financial services firms lack data privacy plan

One-third of financial services organisations do not have a clear plan, or the resources needed, to address consumer data privacy risks over the next 12 months.

Growing privacy risks ©iStock
Growing data privacy risks ©iStock

That is according to a survey of 100 privacy executives in insurance, banking and capital markets by Accenture, which found that 70% see privacy as a clear risk to their firms.

When asked which threats require most effort to remediate over the next year, respondents most often cited privacy risk monitoring, followed by accuracy of records processing.

Accenture said that these risks are heightened by “right to erasure” requests under General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA).

The survey of European and North American executives also found that 76% of companies plan to increase their privacy investments over the next year.

“Given the renewed regulatory focus, it’s not surprising that financial services firms are making privacy a top priority,” said Accenture managing director Ben Shorten.

“But these institutions should think beyond the compliance risks and consider the broader opportunity to elevate the customer experience around privacy.”

After finding that 72% of financial services firms use consent to tailor customer-facing products and services, the report suggests giving consumers more control of their data.

However, it warns that a new class of privacy risks could emerge as companies increasingly focus on demonstrating ethical and responsible use of data in their algorithms.

This could present another opportunity for firms to build consumer trust by providing greater transparency around automated models and introducing ethical guides.

“Consumers are willing to share information if there’s value in it for them, whether personalised offers, better services or more competitive pricing,” Shorten continued.

“Firms that understand how customers perceive and value data privacy have a clear opportunity to differentiate themselves.”

Sign up to our free newsletter here and receive a weekly roundup of news concerning the actuarial profession