As nonbank fintech apps have grown in circulation, so have their users’ concerns about their privacy, according to a survey by The Clearing House.
Two-thirds of consumers who use such apps indicated that they are “extremely concerned” or “very concerned” about data privacy, researchers found.
More than 50 percent of fintech users surveyed indicated that they were uncomfortable sharing credit or debit card information with such apps and roughly 60 percent said they were uncomfortable sharing bank account information.
When asked for personally identifiable information, users said they were most uncomfortable when asked for a Social Security Number or biometric data.
Respondents offered detailed feedback about what types of privacy controls they would like to see in place for such apps.
“Privacy concerns are top of mind for consumers when they use fintech apps, and the survey findings make it clear that most fintech users want to be in control of who accesses their information,” the survey states. “A majority of respondents (56 percent) said they would like to determine which financial accounts and data types can be accessed by a third party. Only 18 percent said they would like to leave these decisions to their primary financial institution.
“When asked about their preferred mechanism for exercising control over third-party access to their data,” the survey continued, “half of consumers (50 percent) would like to have a permissions dashboard that they can access through their primary bank (i.e., the bank in which a consumer conducts their current transactions most frequently). A similar share (47 percent) would like to have a dashboard within the fintech apps they use.”
Despite the commonality of concerns, only 22 percent of fintech users said they would not consent to giving up their credentials, even it if meant not using a particular app. When told that some fintech apps access financial data for purposes beyond the use of the app, 47 percent of respondents said they were less likely to use nonbank fintech apps. The remainder said that fact did not make a difference to them or that they would be more likely to use such apps.
More than 60 percent of respondents indicated that they viewed banks as the most trustworthy institutions in terms of ensuring the safety of their financial data. The American Bankers Association (ABA) noted in a blog post that that viewpoint is in line with findings from other studies. A mere 21 percent said they believed financial aggregators were the best stewards of financial information.
Many of these aggregators’ apps use and store customers’ bank login credentials for access to account information, a practice known as “screen scraping,” ABA noted. Some banks have been developing application programming interfaces (APIs), permitting customers to authorize third parties to access their account information without requiring customers to give up their credentials.