Data Privacy
Sharing your financial data or bank account information is becoming increasingly common, as companies help you make the most of their services and reduce friction during the purchase, payment, or application process. You might be asked to share data to verify your identity, to connect accounts as part of budgeting or financial planning, or in any number of other ways. While the intent of collecting or connecting to your personal financial information may be positive, you will want to remain vigilant about keeping your data secure.
Only Share if You’re Comfortable
Before you start using a service that requires a connection to your bank account or other personal data, be sure you have done your homework. It usually makes more sense when you have an established relationship with a company. If you are not familiar with a company, consider how you learned about them and whether the source is reputable. Read online reviews, ratings, and recommendations from resources you trust. You will also want to ensure that you can contact the company if a privacy issue arises that requires assistance.
Understand How Your Data is Used
While a standardized method for disclosing data usage does not currently exist, many companies will explain their data policies in the terms and conditions of a contract. If they do not make the information readily available, consider contacting the company directly.
Some important questions to ask about how your data is used include:
- How often the company will access your account(s)?
- Will they share your information with a third party
- How is access to your data removed once you terminate your relationship with the company?
If a company cannot provide answers to these questions or the answers do not meet your satisfaction, reconsider sharing your data with them.
Stop Sharing Data When You Stop a Service
With an increasing number of companies requesting access to your data, it is important to keep track of who has access to your financial data or bank account information. If your contract ends or you terminate your relationship with a company, you will want to cancel the authorization for data access and delete the information you may have stored. Deleting an app from your phone does not mean the data you shared is removed – you will want to take the extra step to remove it. There are many tools to help you monitor your data and cancel unwanted subscriptions.
Verify Your Information
When you start sharing your personal data with a company or service, make sure the information they are using is accurate. Review your bank statements and transactions to ensure your information is being used in the way you agreed. The more vigilant you are about detecting unauthorized transactions or errors, you will more quickly be able to report and resolve it.
Take Action During a Data Breach
The potential for a data breach exists in virtually every industry. If a company you share data with experiences one, take action immediately. Change your passwords on the company’s website and any financial accounts being shared with them, then contact your bank for any further steps. The FTC provides tips on creating strong passwords at: Creating Strong Passwords and Other Ways To Protect Your Accounts | Consumer Advice (ftc.gov).
Sharing financial data has become increasingly necessary in our very connected world. The benefits can outweigh the risks if you take steps to protect your data. Do your research, ask the right questions, and monitor your accounts to help you have peace of mind.