The privacy-personalization paradox: How financial services companies can use data responsibly to improve customer experiences

Growing digitization across the financial services sector has led to a proliferation of data that can be used to personalize customer experiences. In the banking sector alone, Statista forecasts the number of U.S. digital banking users will reach 216.8 million by 2025.

This is highly useful for financial services companies, as more and more customers are demanding tailored experiences across omnichannel touchpoints. Over half (54%) of U.S. consumers want personalization from their financial services provider, and the same survey found that 48% would give their financial services provider access to more data if they knew it would result in a better customer experience.

However, while data can help provide visibility into how consumers are interacting with financial services, it can also increase risk if not secured properly. Companies need a comprehensive data security solution that allows them to leverage insights with confidence while still protecting customer privacy and complying with federal and industry regulations.

Key challenges impacting data security for financial services today

According to Imperva, financial services accounted for 28% of all cyber attacks in 2023 — making it the most targeted sector by cyber criminals. This is largely due to the valuable consumer and financial data these companies hold.

Cyber attacks can be costly, both from a financial and productivity perspective. The average data breach costs $4.88 million, and 70% of organizations report significant or very significant disruption to business operations due to a breach. Organizations also have to consider the impact that a data breach can have on their reputation.

An Ernst & Young survey found that confidence in how a financial organization protects customer data is the leading driver of financial trust — even above the quality of an organization’s products and services. The same survey found that 37% of consumers consider a FinTech firm their most trusted financial brand, compared to 33% of consumers who name banks and 12% who name wealth management firms.

In response to the rise in high-profile attacks, government and other regulatory entities have increased compliance pressure on the financial services sector. For example, the U.S. Securities and Exchange Commission (SEC) recently announced amendments to Regulation S-P that tighten the rules around data breach disclosures. Under these new amendments, financial institutions must establish a written incident response program that includes measures to detect, respond to and recover from the unauthorized access or use of customer information. If a breach occurs, companies must notify the affected parties within 30 days.

If organizations are to continue leveraging insights to deliver more personalized customer experiences, they need a better way to secure data wherever it lives.

Protect customer data at the device level with deep data insights

One area of data security for financial services companies to consider is at the device level. Financial institutions are increasingly providing employees with mobile devices to attract and retain top talent. Known as a choose-your-own-device (CYOD) program, this model also frees employees to interact with customers from anywhere—whether in the field as an insurance claims adjuster or on the floor of a branch bank.

However, employee devices like smartphones and tablets represent a significant risk area for financial services companies if not properly secured. More than half (54%) of organizations have experienced a data breach due to unauthorized access to enterprise-owned mobile devices. To combat this risk, internal security teams must go beyond mobile device management (MDM) to understand how employee devices—as well as the applications and data that live on those devices—are being used.

By layering tools for device operational data collection and analysis on top of their existing device or endpoint management solutions, financial institutions can uncover valuable insights for improving the management, productivity and lifecycle of employee devices. For example, security teams can track vulnerabilities across different device models in the fleet to understand which devices are at risk and which are protected by security patches. Teams can also gain visibility into whether a device has ever installed unauthorized software; view activity logs to monitor user behavior; set up email alerts that are triggered when a device meets certain conditions set by IT; and track the last-known locations of devices in the event they are lost or become inactive while in the field.

Ultimately, financial services organizations must align with growing customer demand for personalized digital services. Combining robust device management with a comprehensive business intelligence solution delivers multilayered protection for critical customer and financial data while also enabling employees to meet customers wherever they are.

To learn more about how Samsung can help enhance customer and employee experiences with secure mobile devices, visit our financial services solutions page.