Thousands of Finance Firms Facing Hefty Fines for Breaching GDPR Requirements
Despite facing more scrutiny than many businesses, a new report has revealed that thousands of finance, insurance and accounting firms could be facing fines from regulators for mishandling customer data. According to new research amongst 500 marketing leaders by data company fifty-five, more than two in five (43%) finance businesses have not yet implemented consent management platforms (CMPs). These are essential for managing consumer data and preferences under GDPR.
Nearly half (48%) of those who have not implemented a CMP say their company does not believe it is necessary – but these platforms are critical for the proper management of consumer data and cookies.
Despite this, 16 per cent of businesses in the sector say that one of their most significant concerns is receiving a fine from the Information Commissioners’ Office for a data breach. This is almost three times as the average (6 per cent) who have the same concern in other sectors.
While many businesses are still lagging behind, high levels of regulation in the finance sector – and this fear of fines – do mean that more businesses are compliant than in other sectors. With a 46 per cent implementation rate, the sector is third after the IT and retail sectors (51% and 49%), and significantly above the UK average of 36 per cent.
Richard Wheaton, Managing Director at fifty-five, said: “Respect for the customer’s privacy is at the heart of all financial companies’ principles. And it is imperative that laws are followed to the letter to avoid falling foul of regulators or losing the trust and business of their customers. Finance and accounting businesses are often subject to new rules and regulations, and with the stringent oversight of the FCA, the IFRS and other bodies, they therefore take compliance seriously.”
He continued: “Businesses dragging their heels on implementing a CMP in the finance sector could face double jeopardy – a fine from both the ICO and their regulating body – so it is even more important to get GDPR law and data protection right.”
Of those who have implemented a CMP, 97 per cent of marketing leaders in finance are confident it has been implemented correctly. However, many marketers in the sector are worried about the impact on customer acquisition. More than half (52%) agree that implementing a CMP, which can limit customer tracking via cookies, has affected their ability to win customers, nearly double the overarching average of 28 per cent.
Richard Wheaton continued: “Implementing a CMP effectively can minimise the impact on marketing and build more content-driven and profitable relationships, particularly with privacy-focused customers. Working with the right experts is critical for ensuring compliant data gathering without creating barriers to doing business.”
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