GDPR for Financial Institutions — Move Beyond Compliance to Competitive Differentiation
In the previous blog in this series, we examined the actions financial institutions need to take to ensure readiness for the General Data Protection Regulation (GDPR), which will become enforceable next month, on 25 May 2018, after a two-year transition period. In this last blog of the series, we’ll examine the opportunities financial institutions have if they view GDPR compliance not just as a risk management issue, but as a source of competitive advantage that could be central to brand-building and corporate reputation.
Protect and Respect Customers and Their Data
Data is by far the most valuable asset of any financial services organisation. Financial institutions use data to understand customer needs, find new customers, or increase the value of existing customers. To maintain the privilege of having access to this precious resource, financial institutions must be transparent and accountable to the customers they serve. Recent research from Columbia Business School found that customers were willing (75%) to share sensitive data, including address, mobile phone number, name, and date of birth, in exchange for a product or service they value and a brand they trust. Even more consumers (80%) were positively influenced into sharing personal data with companies when they received special offers or data-enabled benefits, including reward points and product recommendations. The caution here is that GDPR introduces the concept of a shelf-life for permission because a key part of the regulation states that EU Citizens have the right to take back their given permissions. To harness GDPR for business advantage, and motivate customers to continue to share data, financial institutions would do well to use privacy to differentiate themselves from competitors — an advantage in winning and retaining customers.
Privacy as an Organising Principle
Money is personal and emotional. When customers willingly share data, they are displaying the ultimate sign of trust in their financial institution. This is a true reflection of the belief that their financial institution has their best interests at heart. This level of trust cannot be achieved if data protection and privacy are bolted on as an afterthought to application design. When financial institutions treat privacy as an organising principle, the results are often increased loyalty, satisfaction, and engagement from customers that can be leveraged positively to the benefit of all parties. Using this approach — one that promotes privacy and data protection compliance from the start, financial institutions will be well placed to develop a competitive edge over those which only see GDPR as a burden.
Exceptional Customer Experiences Require Integrated Compliance
Maintaining this level of trust while delivering exceptional customer experiences can be challenging for financial institutions who often struggle with siloed legacy systems and back-end data issues that inhibit streamlined processes and efficiency improvements. What is needed is a stable and agile technology platform that preserves existing investments yet can quickly modernise and adapt when regulation evolves and changes due to legal test cases. This approach enables compliance to be integrated with and adapted to key business processes.
This is the solution one leading global financial and insurance company took to ensure consistent service levels across different entities and geographies. They had a complex legacy landscape of different systems across multiple countries and in multiple languages and needed a way to initially meet the deadline for GDPR compliance yet allow for additional development and modifications once the regulation came into force and its impact on their business was better understood. With Appian, they were able to implement a strategy built on transparency and accountability, strengthening the trust of their customers, which is arguably the greatest competitive advantage any financial institution could possess.
Learn More on This Edition of AppianLIVE Expert Cut
To hear more about compliance and the GDPR challenge, tune in for our latest edition of AppianLIVE Expert Cut. This interview with Appian leaders in financial services explains how the Appian low-code development platform provides powerful case management and intelligent automation — including Robotic Process Automation (RPA) and Artificial Intelligence (AI) — required for GDPR preparedness and digital transformation success.