How will the dust settle around GDPR?

The Exchange


The information contained in this page is for professional Financial Adviser use only.

I wouldn’t blame you if you feel like you’ve had your fill of GDPR. The 25 May deadline, and the broad scope of the legislation, has made it difficult to look beyond the detail at the bigger picture, let alone some of the positives it may bring. But the immediate aftermath provides an opportunity to catch our breath and assess some of its wider impacts.

As you’ll know, GDPR applies to companies of all shapes, sizes and sectors. Keeping up to speed with all of the changes that each of the businesses you work with have made, in addition to how your own firm has implemented the new rules, can be a headache in itself.

So I’d like take a look at how the dust is settling now that GDPR has taken effect.

What challenges to expect along the way

Aside from the biggest and most obvious risk brought about by GDPR – large fines for breaching the new rules – businesses across the financial services landscape also face further hurdles that are by no means insignificant.

A company’s approach to cyber security will need to become much more stringent as a result of GDPR. The legislation doesn’t focus on cyber security specifically – a key area of confusion around GDPR – but some of the rules will have a knock-on impact. The legislation includes specific requirements for organisations to report all data breaches within a 72-hour timeframe. This puts considerable pressure on financial services firms to create a wider data and cyber security plan that is actionable and includes a clear chain of command – no small undertaking given the increasing frequency and sophistication of breaches.

The majority of firms across all sectors utilise email marketing to a greater or lesser degree. Under GDPR, many will have chosen to ask customers to actively opt back in to receiving communications from them in future. And, as a result, lots of these businesses will have been left somewhat surprised that their customer contact base has been reduced quite significantly, if more people than expected did not choose to opt back in.

Seeking out the opportunities

The challenges brought about by GDPR are balanced out by significant potential benefits. The data security measures, for example, will force the financial services sector to tackle the issue of cyber security, something which it has been criticised for failing to address properly¹.

The volumes of customer information held by many financial services firms can also be vast, making it difficult to stop the data becoming out of date or incorrect. GDPR will go a long way in helping improve data quality, for a number of reasons. The majority of customers who do not opt back in to communications are not likely to have been engaged with the business for quite some time. The result is that customer contact lists, although reduced in size, will be a much more accurate reflection of actively engaged customers.

GDPR is also an ideal opportunity to reach out to both existing and newer customers, inviting them to update their data and even gather additional information about them. All of this can be used to expand the range and depth of customer data businesses hold, allowing them to gain valuable insight about existing and target markets.

Far from putting up barriers or restrictions, by making companies work harder for their customer data, GDPR is making data work better and harder for both firms, and customers, in return. Surely that’s got to be a good thing?

[1] http://www.fstech.co.uk/fst/Lloyds_Bank_Cyber_Attack_Survey.php

The information contained in this page is for professional Financial Adviser use only. If you are a private investor, please visit the Private Investor section or contact your Financial Adviser for more information.

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