The Future of Data Digital Regulation
In the past few decades technology has expanded so quickly that legislation has had a hard time keeping up. Consequently, many big tech companies now have a reputation for misusing the personal data of their users. In fact, just a few months ago, Facebook’s parent company Meta was fined over 17 million euros for breaching European Union data privacy laws. While recent legislation on the state level has tried to tackle ongoing issues of privacy infringement (think the California Consumer Privacy Act of 2018), problems continue to arise.
So some companies, like Pentadata, have begun to shift their thinking. Instead of putting the responsibility of correct data use on companies, they believe consumers should be in control of their data and have the final say as to who has access to it and for what reason.
How to give consumers control of their financial data?
Through processes like API and open banking, companies are able to access the personal financial information of their consumers – IF they’ve been given permission. Transparency is key. At Pentadata, we’re committed to helping consumers understand exactly what is happening when they give access permission to the companies they interact with. That transparency goes a long way to build trusting, long-lasting relationships between consumers and companies. It seems like a simple concept – Pentadata’s platforms only use data that the consumer has given explicit permission to access – but it makes all the difference.
At Pentadata, we highly recommend that consumers read the actual language that companies are now required to provide. It’s important to know what exactly you’re giving permission to before you click that “Accept” button. When you know what the notice says, then you can decide for yourself whether or not it’s something you want to give you information to.
As a consumer, you may be tempted to think that it would be better to never allow companies to access your private digital data, especially highly sensitive information like financial data. Yet there are actually a lot of benefits of providing companies access – things like card-linked offers, personalized platforms, and financial planning services. When you give permission to the right companies, you as the consumer can benefit greatly.
If you’re a company, there are some easy principles you can follow to build trust and reliability with your consumers. First of all, it’s absolutely necessary to be transparent about what you’re doing with data and why moving forward. Never use personal data illegally! And stay up on data regulations as they continue to change and expand.
As tech continues to expand, it’s obvious that there’s still work to be done in establishing data regulations. In 2011 the Consumer Financial Protection Bureau was founded, ruling about data portability and access. In 2018 the California Consumer Privacy Act passed with the goal of enhancing privacy rights and consumer protection for residents of California. These entities and regulations have started a process that will need to continue on to the federal level, so that digital data can be protected and used in positive ways moving forward.
*To hear more on this, click here to listen to Episode #70 of the podcast Commerce Code