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Consumers have relied more heavily on payments apps and other fintech technologies since the onset of the pandemic, but few are aware of how much control these apps have over consumer data, according to a recent survey released by The Clearing House Payments Co.
In fact, consumer confidence in the security of their information has only increased in the wake of Covid. Some 73% of consumers expressed confidence in the privacy of the information they enter in apps, and 75% said the same about the security of their data, up from 70% in both instances in a similar survey in 2019.
Yet, 77% admitted in the 2021 survey that they had not read all the terms and conditions applicable to the apps they were using.
“More consumers are using financial apps, but they’re still in the dark about how their data is used, accessed, and stored,” said Ben Isaacson, senior vice president of product strategy at New York-based TCH, in a statement.
TCH, which has polled consumers about data privacy since 2018, queried 4,019 banking consumers in September. Some 2,013 were financial-app users and 2,006 were not. Questions in the poll had to do with consumers’ perceptions of how financial apps access, use, store, and share data. Included in the poll were 11 well-known apps, including those of PayPal, Venmo, Square (Cash App), Zelle, and Coinbase.
The poll found that nearly one-third of consumers had increased their usage of fintech apps since 2019, while only 8% had decreased usage. The big winner among the 11 apps is Cash App, which registered a 17% rise in users. PayPal saw a 4% decline, but remains the most popular app among the 11, according to TCH’s poll, which was conducted by the polling firm Hall & Partners.
While consumers remain blasé about the security of the data they enter, they are equally unaware of the ways that data is being accessed. Some 80% indicated they were not aware that apps use third parties, called data aggregators, to access the information in their accounts, while 24% didn’t know that aggregators can sell personal data.
A trade organization called the Financial Data Exchange (FDX) has been working on a set of standards to govern this access and the resulting commerce in data.
The power and utility of the fintech apps is revealed in the survey’s result showing that less than half of consumers who are informed about how the apps access their data—some 40%—said the knowledge would cause them to use the apps less. That’s down from 53% in 2019.
Nonetheless, the survey indicates consumers want more control over their data within the apps. The most popular change—clear disclosure of the data third parties can access—attracted 59% of respondents. Some 56% support the idea of letting the consumer set controls over which account—and what kind of data—can be accessed by a third party. Just 5% indicated they are “indifferent” about how their data is accessed and used.
The Clearing House, which is owned by 24 major financial institutions, is part owner of Akoya LLC, an account-access protection network. The platform, which went live in 2019, uses an application programming interface based on FDX’s standard. The other owners include FMR LLC, parent company of Fidelity Investments, and 11 of TCH’s member banks.
