Cybersecurity

Report: 1/3 of financial firms lack clear plan to address privacy risks

While data privacy is one of the main issues many organizations consider a priority, Accenture report states that one-third of financial firms don’t really have a clear strategy to address risks in the coming months.

The report titled “Privacy in Financial Services: Stature and Sustainability in the Information Age” also saw 7 in 10 respondents (70%) see privacy as a key risk for their firms, increasing the need for a clear privacy strategy. Financial firms surveyed (51%) also said the most often cited privacy risk monitoring as among the privacy risks that may need more effort to address. It is followed by the accuracy and maintenance of records processing and information asset registers (44%) and records management and data retention/deletion (41%).

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Almost three-quarters of 72% of respondents’ companies use consent to tailor customer-facing products and services.

“Privacy in Financial Services: Stature and Sustainability in the Information Age” was based on an online survey of 100 privacy executives at banks, insurance companies and capital markets firms across North America and Europe (Canada, France, Germany, Italy, Spain, Switzerland, the United Kingdome, and the United States). The survey was conducted by Accenture Research in December 2019 and January 2020.

“Given the renewed regulatory focus and threat of significant financial fines, it’s not surprising that financial services firms are making privacy a top priority,” said Ben Shorten, a managing director in Accenture’s Strategy & Consulting group.

“But these institutions should think beyond the compliance risks and consider the broader opportunity to elevate the customer experience around privacy. Consumers are willing to share information if there’s value in it for them, whether personalized offers, better services or more competitive pricing. Firms that understand how customers perceive and value data privacy have a clear opportunity to differentiate themselves.”

Privacy investments

The report notes that while three-fourths (76%) of respondents plan to increase their privacy investments over the next year, companies without a clear privacy strategy could fail to reap the expected value from these investments — while those that create clear strategies and infuse a culture of privacy awareness across their organizations will differentiate themselves and build consumer trust.

As firms increasingly focus on demonstrating ethical and responsible use of data in their artificial intelligence and machine-learning algorithms, a new class of privacy risks related to data ethics could emerge. This presents another opportunity for firms to build consumer trust by providing greater transparency around automated decision models and introducing ethical guide rails for the use of personal data.