Financial services firms must put robust governance and privacy safeguards in place to deliver richer and more evolved customer experiences.
The proliferation of data, paired with emerging technologies such as artificial intelligence, have generated enormous opportunities for financial institutions and their customers. Financial services companies are gaining a clearer sense of what their customers want, where they want it, when they want it and how they want to get it.
Customer activities and associated data insights educate financial services firms further on customer nuances, activities and preferences — enriching the overall experience. While data has immeasurably improved a range of functions and processes (e.g., customer service, compliance, financial crime, regulatory reporting), the manner in which data is used by these organizations carries significant potential privacy implications and further regulatory scrutiny.
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The changing nature of data governance
Data governance is difficult to put into practice at many firms due to a range of factors, including a growing web of various privacy requirements, particularly in sectors with vast quantities of sensitive consumer data. For context, data privacy addresses a combination of legacy and new regulations, both foreign and domestic (refer to sidebar). These regulations are also coupled with growing concerns and expectations related to cybersecurity, such as New York Department of Financial Services Cybersecurity Regulation (23 NYCRR 500),1 the Federal Information Security Management Act (FISMA) and the Federal Exchange Data Breach Notification Act, among others.
In fact, while data privacy is evolving to address a complex patchwork of regulations and technical challenges, it should, at its core, commitment from financial institutions to safeguard customer data, while using and retaining only requisite data to generate insights in a pragmatic, measured and prudent manner to enrich customer experiences.