The Future of Data Privacy in Credit Unions: Trends and Predictions
People expect that their personal data and financial information will remain protected at all times, especially when it comes to the data they provide to credit unions, banks, and other financial institutions. It’s easy to see why this is the case.
A single data breach can send massive volumes of extremely sensitive personal and financial data out into the world. Once information is released on the internet, your control over that data is gone for good, along with any semblance of privacy for that information.
To say that data management practices ought to be regarded as major risk factors and areas of vulnerability is an understatement. Fortunately, an increasing number of companies are focusing on data privacy management — a common element of a credit union’s risk management landscape.
The issue of data privacy is extremely important for credit unions and other financial institutions. Clients provide credit unions with extremely sensitive data such as personal details and financial information. We expect full security measures with robust data privacy, encryption, firewalls, and smart data management processes. This all begs the question: what does the future of data security look like? And what does this mean for the future of data privacy management? What will that look like?
Why is Credit Union Data Privacy a Concern?
There are a few factors that have turned data privacy into a key area of concern amongst credit unions, banks, and other financial institutions. To understand these issues is to gain valuable insights into what the future holds for a credit union’s data privacy management efforts.
Firstly, there is a lot more digital data to consider. This point has been a major driving factor in the world of data management. Digital transformations and the movement toward digitization means that credit unions — along with virtually every other business on the planet — are generating increasingly larger volumes of data.
Data creation aside, there’s also a dramatic rise in data collection volumes. Stated simply, credit unions aren’t just creating and generating more data; they’re also collecting more data in the course of business.
The more data you have, the more your credit union will want to consider that data when planning for digital transformation projects and developing data-related strategies.
On the whole. credit unions and other financial institutions have traditionally been very aware of their risk management landscape due to the nature of banking business models — business models with an increasingly-voluminous variety of in-built risk factors and vulnerabilities — vulnerabilities and risks that cannot be fully mitigated. This may make for some very complicated risk management efforts.
The reality is that data privacy and data security have always been high-profile elements of a credit union’s risk management landscape. As such, data privacy has garnered an increased amount of attention, accounting for a larger slice of the pie, so to speak.
Financial institutions’ decision-makers and stakeholders are putting an eye toward tomorrow as they consider the future of credit union data privacy and security.
COVID-19 and a Greater Focus on Risk Management Will Lead to Improved Data Privacy
Recent months have seen a greater focus on risk management, with data management being a major area of focus. This is a shift that most attribute to the COVID-19 pandemic. The pandemic brought risks and vulnerabilities into clear focus. Traditionally-stable banks, credit unions, and other financial institutions were suddenly confronted with a sharp change in their risk management situation. Many credit unions were confronted with new risks and vulnerabilities. Others saw a voluminous increase in the number of risk factors and vulnerabilities affecting the organization.
It’s worth noting that a vast majority of the businesses that best weathered the COVID-19 pandemic embraced new technology and digital transformation projects. Lots of these companies deployed technology designed to improve data privacy and security. Many business leaders and decision-makers within the financial space are now deploying new data management platforms with data privacy and data security capabilities. It stands to reason that this trend will continue in the coming months and years.
Regulatory Compliance Will Drive Increases in Data Privacy Management Efforts
Financial institutions are subjected to some of the world’s most intense regulatory oversight. The goal: to improve accountability and reliability, amongst other things.
Regulatory compliance accounts for a big piece of a financial institution’s risk management landscape. Noncompliance can result in hefty fines and penalties. In fact, a recent round of fines and penalties totaled a combined sum of $1.8 billion dollars for nearly a dozen major financial institutions.
With fines like this, it’s easy to see why regulatory compliance issues are key considerations in a credit union’s risk management landscape. Fines and penalties for noncompliance have caused companies to shutter storefronts. With realities such as this, credit unions place regulatory compliance at the top of their risk management agendas.
Regulatory requirements virtually always include mandates related to data management. And those data management strategies virtually always address data security issues such as data privacy management.
There also exists a diverse, ever-growing variety of financial industry oversight groups, watchdog organizations, and regulatory compliance groups. Most agree that the financial space will see continued growth in the number of regulatory agencies, which opens the door to a big jump in the number of new data privacy and data management requirements. But it doesn’t end there.
Ultimately, as more and more regulatory oversight groups come on the scene, it’s fair to expect an increase in the number of regulatory requirements affecting credit unions, banks, and other financial institutions. This translates into new and modified requirements, which will in turn spur the development of new data privacy management protocols and processes.
Considerations for Choosing a Data Privacy Management Solution for a Credit Union
The right technology is essential for success and this rings true for the development of a custom data privacy management solution.
Stand-alone data privacy management solutions are rather uncommon. More commonly, data privacy-related tools are found as a module within a data management platform or as part of a risk management software platform.
There is no one-size-fits-all solution when it comes to data privacy management.
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Making the Most of Your Credit Union’s Data With a Custom Data Privacy Management Solution
Data is valuable. Data opens the door to a variety of vulnerabilities and risk factors. Data management efforts represent a key component of a credit union’s risk management landscape. Effective data management is challenging.
Understanding how a credit union’s data is handled is important. With all things considered, future data security and data privacy trends will become apparent. But you need the right data privacy management solution to see results and a robust ROI.
The iTech team specializes in helping organizations such as credit unions, banks, and other financial institutions in their efforts to make the most of their data. This includes the creation of data privacy management software solutions. We work to understand the credit union’s challenges and future objectives.
With this information in mind, iTech’s talented developers create the technology that a credit union needs to be effective and efficient in its data privacy management efforts. We invite you to contact the iTech team today to discuss your credit union’s needs for a data privacy management solution.