Data privacy is a large (and growing!) concern in all industries, but it’s an especially big pain point for financial services customers.

That’s for a good reason: If they can’t trust you with their data, why would they even think about trusting you with their money?

Respondents to a 2022 Morning Consult survey indicated that financial services is the industry where data privacy matters most. In fact, it even ranks above sectors including healthcare, technology, and social media.

So what is data privacy, why does it matter, and what can you do to keep your financial services firm’s customers safe and happy? Let’s get into it.

What Is Data Privacy?

Data privacy involves consumers understanding and controlling how their private information is collected, used and shared. And this data is rarely more vulnerable (and valuable!) than in the financial services industry.

We’ve all ended up on mailing lists or received cold sales calls without quite knowing how the person on the other end got our information. Usually, it’s a simple matter of hitting the unsubscribe button or politely asking the overworked telemarketer not to call us again.

Annoying? Yes. Life-altering? Not exactly.

But in the financial services game, there’s a lot more at stake. It’s not just your phone number or email address that’s up for grabs — it’s your debit or credit card numbers, bank account information, employment details, Social Security number, mother’s maiden name, and just about any other ultra-private tidbit that can seriously mess up your week (or year) if it falls into the wrong hands.

Financial services firms need to take data privacy seriously if they want to stay in business.

Best Practices to Safeguard Your Financial Services Customers’ Data

Know the Regulatory Mandates

Financial services firms must abide by some hard-and-fast rules. And if you don’t stay in compliance, there are some very real consequences.

From the Gramm-Leach-Bliley Act (GLBA), which controls personal information collected by financial institutions, to the Fair Credit Reporting Act (FCRA), which deals with credit information to state-specific data privacy laws, understanding exactly what you can and cannot do in regard to consumer data is crucial.

Be Honest With Your Customers

Data privacy is the biggest concern in the financial services industry. But traits such as trust and honesty aren’t too far behind. And the best way to be an honest, trustworthy firm is to practice transparency.

Always tell your customers what data you’re collecting, why you need it, and what you plan to do with it. Then actually do what you say you will. Telling someone that you never sell data only for them to end up with a mailbox filled with third-party “preapproved” offers isn’t a good look.

Don’t Skimp on Security

Most financial services hacks and breaches happen because firms haven’t taken the proper security measures to prevent them.

But security is more than encryption and two-factor authentication. To keep your customers’ data safe, you also need to ensure that your staff understands cybersecurity protocols, that you’re regularly backing up your data and storing it in a secure location, and that your software stays up to date.

Data Privacy and Consumer Trust Go Hand in Hand!

Today’s consumers are more educated and privacy-conscious than ever, and if they get the slightest inkling that their data is at risk in your hands, they’ll head directly to your nearest competitor. To succeed in the financial services industry, your firm needs to safeguard sensitive information at all costs!

Mischa Communications understands the challenges that financial services marketers face. (We’re Cleveland’s premiere financial services marketing agency for a reason!) You don’t have to do this alone. We’re here to help!