How do you evaluate privacy and security risks for new fintech products?

1 Data collection and storage

One of the first questions to ask is what kind of data the fintech product collects and stores, and for what purpose. Data can include personal information, financial transactions, biometric identifiers, location, behavior, preferences, and more. The more data the product collects, the more value it can offer, but also the more risk it creates. You need to ensure that the data is collected and stored in a lawful, transparent, and secure manner, and that it is not shared or sold without your consent. You also need to know how long the data is retained, and how you can access, correct, or delete it if needed.

2 Data protection and encryption

Another question to ask is how the fintech product protects and encrypts the data, both in transit and at rest. Data protection and encryption are essential to prevent unauthorized access, theft, or manipulation of the data. You need to look for fintech products that use strong encryption algorithms, secure communication protocols, and robust authentication and authorization mechanisms. You also need to check if the product complies with relevant standards and regulations, such as the Payment Card Industry Data Security Standard (PCI DSS), the General Data Protection Regulation (GDPR), or the California Consumer Privacy Act (CCPA).

3 Data breach and incident response

A third question to ask is how the fintech product handles data breach and incident response, and what are your rights and responsibilities in case of a breach. Data breach and incident response are crucial to minimize the impact and damage of a data breach, and to restore trust and confidence. You need to find out if the fintech product has a clear and comprehensive data breach policy and procedure, and if it notifies you promptly and transparently in case of a breach. You also need to know what actions you can take to protect yourself, such as changing your passwords, freezing your accounts, or contacting your bank or credit card company.

4 User control and consent

A fourth question to ask is how much control and consent you have over your data and your use of the fintech product. User control and consent are important to respect your privacy and autonomy, and to avoid unwanted or harmful consequences. You need to ensure that the fintech product gives you clear and easy options to opt-in or opt-out of data collection, sharing, or processing, and that it does not coerce or deceive you into giving consent. You also need to be able to revoke your consent at any time, and to withdraw from the product without losing your data or facing penalties.

5 Third-party integration and oversight

A fifth question to ask is how the fintech product integrates and interacts with third-party services or platforms, and what are the implications for your privacy and security. Third-party integration and oversight are relevant to understand the scope and limits of your data protection and control, and to avoid potential conflicts or vulnerabilities. You need to be aware of the terms and conditions, the privacy policies, and the security practices of the third-party services or platforms that the fintech product uses or connects to, and how they affect your rights and obligations. You also need to verify if the fintech product is subject to any external audit, review, or certification, and what are the results and recommendations.

6 Risk assessment and mitigation

A final question to ask is how the fintech product assesses and mitigates the privacy and security risks, and what are the trade-offs and benefits. Risk assessment and mitigation are essential to balance the risks and rewards of using the fintech product, and to make informed and rational decisions. You need to evaluate the likelihood and impact of the privacy and security risks, and the effectiveness and cost of the mitigation measures. You also need to weigh the risks and benefits of using the fintech product, and compare them with alternative options or solutions.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?