# Where to now for financial marketers?
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2019-05-28
Category: BUSINESS
Category URL: https://financedigest.com/category/business
Meta Title: The GDPR's Impact on Financial Brands: Transparency & Trust
Meta Description: Explore factors shaping a new era for financial brands, with GDPR exposing data practices and Open Banking raising concerns over personal financial data
Tags: featured
Tag URLs: featured (https://financedigest.com/tag/featured)
URL: https://financedigest.com/where-to-now-for-financial-marketershtml

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by **Peter Matthews** of [https://www.nucleus.co.uk](https://www.nucleus.co.uk)

It looks like Google and Facebook’s data-by-stealth model is in the spotlight.  GDPR has exposed the once highly profitable personal data collection practices which have underpinned Big Tech’s business model for years.

Whilst there is no getting away from the fact that we live in a data economy, GDPR has marked out some boundaries that, until now, have been poorly defined and hardly ever policed.

Where behavioural data was once considered to be the oil of the Data Economy, [consumers are now more aware](https://www.financedigest.com/increasing-consumer-awareness-to-fuel-adoption-of-trailer-suspension-system-market.html "Increasing Consumer Awareness to Fuel Adoption of Trailer Suspension System Market") of the fact that it has frequently been exploited.

Financial organisations are no strangers to regulations, and adhering to these has always required the collection of large amounts of [customer data](https://www.financedigest.com/why-now-is-the-time-for-banks-to-use-their-data-to-support-customers.html "Why now is the time for banks to use their data to support customers"). This is then collated and used for various activities from customer on-boarding, relationship management through to trade-booking, and accounting.

Whilst this data offers banks a bird’s [eye view](https://www.financedigest.com/the-fruit-puree-market-to-stage-innovation-based-eagle-eye-view.html "The Fruit Puree Market To Stage Innovation-Based Eagle-Eye View") of their customers’ financial habits it has not resulted in their improving users’ experiences or their own decision making.

If banks truly want to [meet their customers’ expectations and respond to their Fintech](https://www.financedigest.com/fintech-incubation-more-value-than-meets-the-eye.html "FINTECH INCUBATION: MORE VALUE THAN MEETS THE EYE") challengers, they are going to have to shift their approach to personalisation and build a new engagement model, based on transparency and trust. Handled properly this could usher in a new era for financial brands to enhance engagement and loyalty.

As it stands GDPR is not the only [data challenge](https://www.financedigest.com/meeting-the-data-challenge-in-financial-services.html "Meeting the data challenge in financial services"). Embracing the competitive opportunities and threats of [Open Banking](https://www.financedigest.com/why-open-banking-heralds-a-new-era-of-ecommerce-merchant-and-bank-collaboration.html "Why Open Banking Heralds a New Era of eCommerce Merchant and Bank Collaboration") (PSD2) is also on this year’s agenda, as is understanding where the two complement or clash. On the face of it, [Open Banking brings consumers advantages in promoting competition between financial services](https://www.financedigest.com/the-future-of-financial-services-how-apis-are-fuelling-the-rapid-rise-of-open-banking.html "The future of financial services – how APIs are fuelling the rapid rise of Open Banking") providers, working to the benefit of many Fintechs and, in theory, providing customers with more control over their financial data.

But in practice, what percentage of consumers really want to allow Fintechs access to their bank and [credit card](https://www.financedigest.com/credit-cards-how-to-choose-a-credit-card.html "Credit Cards: How to choose a credit card") accounts, so an app can tell them how much they are spending on coffee? That’s not much of a [value exchange for sharing](https://www.financedigest.com/gonorrhea-therapeutics-market-value-share-supply-demand-share-and-value-chain-2021-2031.html "Gonorrhea Therapeutics Market Value Share, Supply Demand, share and Value Chain 2021-2031") very personal data.

**The Open Banking dilemma**

From cookies in browsers to mapping social media behaviour, trawling personal contacts, tracking where you go and even what you say, [Big Tech](https://www.financedigest.com/exclusive-with-eye-on-big-tech-energy-crisis-eu-telcos-call-for-shared-network-costs.html "Exclusive-With eye on Big Tech, energy crisis, EU telcos call for shared network costs") has turned consumers into products whose profiles they sell to advertisers. Now, with Open Banking, if your [personal finance](https://www.financedigest.com/six-ways-to-prepare-for-a-personal-finance-crisis.html "Six ways to prepare for a personal finance crisis") profile were to fall into the hands of Big Tech, your financial data profile could be combined with your social media profile, plus everything else Big Tech knows about you.

[Open Banking](https://www.financedigest.com/open-finance-and-smart-ecosystems-wont-wait-for-banks.html "Open Finance and Smart Ecosystems Won’t Wait for Banks") is a regulated activity but facilitates personal financial data to be aggregated to create a 360-degree customer view, which regulated financial brands can use to profile and score individual consumers.

YouGov 2018 research indicates that 72% of UK adults hadn’t even heard of Open Banking and 77% say they would be concerned with [sharing financial data](https://www.financedigest.com/asia-shares-edge-higher-wary-of-us-bank-data.html "Asia shares edge higher, wary of US bank data") with anyone other than their main bank. In a post-GDPR environment, the very idea of sharing personal financial [data with multiple](https://www.financedigest.com/how-to-navigate-multiple-data-privacy-regulatory-frameworks.html "How to navigate multiple data privacy regulatory frameworks") financial brands would seem invasive to many, especially to older demographic groups.

**The productising of consumers**

We are beginning to [see how GDPR – which includes ‘the right to know’ what personal data is held by any company operating in the EU and ‘the right to be forgotten’ – will curtail the productising of consumers by Big](https://www.financedigest.com/bae-systems-sees-big-opportunity-in-space-after-uk-satellite-bolt-on.html "BAE Systems sees big opportunity in space after UK satellite bolt-on") Tech, at least without specific consent. But will the same principles apply to Open Banking? Or will customer’s financial [data become](https://www.financedigest.com/becoming-data-ready-for-mtd-for-corporation-tax-aligning-vat-and-ct.html "Becoming data-ready for MTD for Corporation Tax: aligning VAT and CT") available for authorised and unauthorised actors to exploit – and cyber criminals to hack into?

Interesting [future developments](https://www.financedigest.com/chromoendoscopy-agents-market-2031-report-details-the-future-development-manufacturers-trends-share-size-and-forecast.html "Chromoendoscopy Agents Market 2031 Report Details the Future Development, Manufacturers, Trends, Share, Size and Forecast") include Big Tech companies entering financial services (think Google Pay, Apple Pay and Apple’s recently announced credit card) to combine all this financial data with what they already hold, while others may take the side of the consumer.

**A new** [value adding strategy](https://www.financedigest.com/the-value-of-customer-centricity-to-c-suite-financial-strategy.html "The value of customer-centricity to C-Suite financial strategy")

In February Apple sent out a strong message when it [blocked Facebook](https://www.financedigest.com/russia-blocks-facebook-accusing-it-of-restricting-access-to-russian-media.html "Russia blocks Facebook, accusing it of restricting access to Russian media") from running internal iOS apps. The restrictions came after Facebook was found tracking teenagers’ iPhone usage data. Tim Cook, Apple’s CEO, has also called for new [digital privacy](https://www.financedigest.com/digital-pound-could-hit-financial-stability-and-erode-privacy-uk-lawmakers-warn.html "Digital pound could hit financial stability and erode privacy, UK lawmakers warn") laws in the United States (not unlike GDPR), warning that the vast scale of personal data processing is harming society.

Most recently, at the launch of Apple TV+ Tim Cook hinted at ‘baking-in security to Apple’s entire eco-system’. Could [Apple be building a new business model based on privacy and consent to contrast with Facebook and Google](https://www.financedigest.com/s-korea-parliament-committee-votes-to-curb-google-apple-commission-dominance.html "S.Korea parliament committee votes to curb Google, Apple commission dominance")? Could [banks follow suit](https://www.financedigest.com/why-google-is-never-closed-for-maintenance-and-how-banks-can-follow-suit.html "Why Google is never closed for maintenance and how banks can follow suit") and rebuild their value propositions based on core values of trust and consent and a more nuanced understanding of the customer?

**Leveraging data – ethically**

When it comes to [effective data](https://www.financedigest.com/can-banks-compete-in-the-digitisation-race-without-effective-data-integrity.html "Can banks compete in the digitisation race without effective data integrity?") management and valued customer benefits there is a gulf emerging between Fintech neobanks and their more traditional counterparts. Fintechs and [challenger banks](https://www.financedigest.com/the-rise-of-challenger-banks.html "challenger banks") have spotted the opportunity to use streamlined digital platforms to leverage data to segment the market in quite meaningful ways and are hungry to exploit Open Banking. In fact, many have business models predicated on this.

Big heritage banks, on the other hand, are still struggling to use their data in ways that [offer users clear advantages](https://www.financedigest.com/rocket-missile-market-advantages-offered-by-rockets-missiles-and-increasing-adoption-of-missiles-to-drive-market.html "Rocket & Missile Market – Advantages Offered By Rockets & Missiles And Increasing Adoption Of Missiles to Drive Market"). Unsurprisingly they are more reticent to embrace Open Banking, especially sharing their customers’ current accounts with third parties, whose aim is to siphon-off profitable services, [leaving the regulated banks](https://www.financedigest.com/societe-generale-says-two-senior-executives-to-leave-bank.html "Societe Generale says two senior executives to leave bank") with most of the compliance and cost.

**The value of** [consumer trust](https://www.financedigest.com/trusting-in-trust-marks-enhancing-consumer-trust-in-your-ecommerce-business.html "Trusting in trust marks: enhancing consumer trust in your ecommerce business ")

GDPR and [Open Banking present the chance for financial marketers to re-engage with customers](https://www.financedigest.com/strong-customer-authentication-must-be-adopted-to-make-open-banking-a-success.html "Strong Customer Authentication must be adopted to make open banking a Success") and educate them around the benefits of safe data sharing. Ultimately harnessing personal data should improve the [customer experience](https://www.financedigest.com/customer-experience-creating-the-calm-in-the-chaos.html "Customer Experience: creating the calm in the chaos") but it must reward them with a share in its value.

Showing that there are secure data governance strategies in place can go a long way towards fostering [consumer trust and helping to build](https://www.financedigest.com/epi-how-to-build-trust-and-adoption-among-consumers-and-merchants.html "EPI: How to build trust and adoption among consumers and merchants") strong brand relationships. As a consequence, finance marketers must strive to [allay any fears individuals may have around how their data is gathered](https://www.financedigest.com/euro-zone-recovery-gathers-pace-allays-fears-of-recession-pmi.html "Euro zone recovery gathers pace, allays fears of recession-PMI") and used. And build this into their brand DNA.

**The [competitive advantage](https://www.financedigest.com/how-automation-gives-fs-leaders-a-competitive-advantage.html "How automation gives FS leaders a competitive advantage") of privacy**

Getting privacy right should be viewed as a competitive advantage. We are all more likely to trust a [service provider](https://www.financedigest.com/unprecedented-constructive-disruption-to-drive-the-sleep-service-providers-market.html "Unprecedented, constructive disruption to drive the Sleep Service Providers Market") who values our privacy (beyond mere legal compliance) and is transparent about how our data is used. And trust still equals loyalty.

With so much personal data already held by big financial brands, and regulators beginning to flex their muscles when consent is taken for granted, [marketers need to balance the golden allure of big data](https://www.financedigest.com/marine-big-data-market-to-expand-at-cagr-of-21-5-during-forecast-period-tmr-insights.html "Marine Big Data Market to Expand at CAGR of 21.5% During Forecast Period – TMR Insights") with its risks, and recognise that consumers still value privacy.

Only when they do will we [see personalisation valued](https://www.financedigest.com/delivery-hero-sees-higher-gross-merchandise-value-in-third-quarter.html "Delivery Hero sees higher gross merchandise value in third quarter") by brands and by customers.


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