What Data do Canadian Fintech Companies Collect About You?
<hl>Find out what type of data Fintech companies collect and why.<hl>
A guest post by Priya Correia, Marketing Coordinator at Loans Canada
Fintech, also known as Financial Technology, describes the industry that utilizes new tech to improve and enhance the use and application of different financial services. Fintech companies leverage the power of technology through innovations such as artificial intelligence, cloud-based computing, mobile devices, and big data. Their goal is to improve the speed, cost, and overall efficiency when it comes to providing financial services.
Type of Fintech Companies
Countless Fintech companies in Canada are changing the financial services landscape. Banks are no longer the sole source for consumer borrowing, investing, saving, and other financial related needs. Some of the most common fintech products and services offered are:
- Consumer banking - Companies, like Tangerine, offer Canadian consumers traditional banking services but via a fully online interface.
- Investing - Many companies like Wealthsimple (Robo-advisors) have popped up providing apps and programs that allow you to manage your investments hands-free.
- Borrowing - Fintechs can provide consumers with a range of credit products that often have an underwriting process that is fully or partially automated, making it faster and easier to get approved.
- Equity Financing - Fintech has also affected equity financing through crowdfunding and peer-to-peer lending platforms.
- Money Transfer Services - Many money transfer services are now available online for much cheaper and faster options.
- Digital Wallets - The way we make payments and how we carry our credit and debit cards have also changed through the use of digital wallets.
- Cryptocurrencies - The use of cryptocurrencies like bitcoin is also a development of fintech companies.
The way consumers bank, invest, pay, borrow, and trade has transformed and will continue to evolve because of the new technology fintech companies have adopted.
What Type of Data Do Fintechs Collect and Why?
While Fintechs have changed the landscape of financial services, they have also changed the way data is collected. When you opt for a fintech company, you’ll have to provide certain information to access their financial services or products. In general, there are three types of information collected.
Personally Identifiable Information (PII)
Personally Identifiable Information (PII) is any data collected that will allow the fintech company to identify you. This can include non-sensitive information like your name, address, and sensitive information like your Social Insurance/Security Number (SIN/SSN) and driver license. PII can also include your IP address, behavioural data, and geolocation.
Financial Profile Info
Fintech companies may also collect your financial profile information, particularly lending companies, to evaluate your ability to pay. Customarily, these companies will collect financial information such as your income, bank transactions, and employment details. This information will allow the company to assess your financial health and understand how much extra debt you can handle. Bank transaction data is also commonly used by budgeting apps such as Mint, to analyze your spending habits.
Depending on the company, some may check your credit score in order to evaluate your creditworthiness. A high credit score is a good indicator to lenders, in particular, that you have been good with your debts in the pasts. This gives them confidence that you will repay your debt if they lend you money.
When sharing your data with a fintech company, it is important to read the fine print as some companies will add in a clause that allows them to sell and share your data with other third-party organizations.
Companies may implicitly share your name, IP address, bank information such as your transaction history, your email, phone number, behavioural data and more. Many companies want your data as it is a rich source of information that allows them to market to you in a very personalized and targeted manner.
If this sounds intrusive to you and you’d like to stop companies from using and selling your information, you should read the fine print on how you can opt-out. Some companies will require you to email their customer service with a formal request to opt-out while other companies simply require you to log into your account and manage your privacy settings.
Risks Involved in Sharing Your Data With a Fintech
Your data is yours to control and give. So finding out that your personal data is possibly being shared by third parties that you do not know is disconcerting. Thankfully there are ways you can protect your data.
You can protect your data from being used by doing a few things.
- Deleting any apps, you don’t need or use. For example, Facebook allows you to remove apps and websites using your information on Facebook.
- Requesting account and data deletion for those apps you don’t need to use.
- Using ad blockers when browsing the web.
- Adjust your privacy setting to limit what kind of data you share with the company. For example, Facebook allows you to choose what information you don’t want to share, such as your name, place of work, address, etc.
- A VPN is a useful privacy tool that can’t prevent companies from tracking your IP address.
Can You Get Your Data Back Once It’s Been Collected?
You can reclaim your data by contacting the companies who have collected your information and request they delete it. Depending on the jurisdiction, these companies are required to delete your information if you request it. The challenge, of course, is that you have to reach out to each individual company who has your data and request its removal.
Fortunately, services like Mine are available to help make your data-reclaiming process more efficient. Mine will help you discover what companies have access to your data and then allow you to easily send email requests to the companies to reclaim your data from them.
The Fintech industry has exploded over the last few years as demand for fintech solutions has grown. While Fintech has enhanced the way we use and access different financial services, it has also exposed consumers to privacy breaches and data leaks. Fortunately, as the financial services landscape changes so have the ways we can protect our data.