Privacy strategy for Nigerian fintech companies – Businessamlive

BY MICHAEL IRENE, PhD.

There has been a very good growth of fintech companies around the world and there are good reasons for this. First, it presents a new way of banking transactions, opens up the competitiveness of old banking procedures, and questions the existing status quo; and this has led to the explosion of entrepreneurial endeavors. Yet most of these new companies, especially in Nigeria, overlook the importance of privacy and how, if they are strategically aligned with their business missions and visions, they will build a sustainable and viable business in these global economic environments.

First, let me start by stating that fintech is the short form of financial technology in terms of the use of computer and communication technology in the development of financial services. This innovation makes it possible to reduce manual processes in payment processes, set up accounts and create products that can benefit existing and new customers.

To address the privacy strategy topic for Nigerian fintech companies, I will first lay a foundation by outlining some of the common uses of the fintech industry. They include e-payment and remittances (e-wallet), algorithmic trading, data analysis that supports operations, open application application interface, just to name a few. It should be noted that not all Nigerian fintech companies engage in these activities.

But by using these, let’s now tease the privacy risks of Nigerian fintech and offer strategies to set them on a global standard. The first and clear imminent risk is the collection and use of personal information without notice or meaningful consent. When one reads many privacy statements from these companies, one notices that the use of language is purely legal and often confusing and thus reduces the openness and fairness approach in the industry.

With e-payment, the e-payment service provider sometimes collects more information than is necessary for the services they have promised in their contracts. Not to mention any company, but there have been cases where some Nigerian fintech companies use this way to accurately predict customer behavior and preferences by profiling, which raises the question of the business integrity of these companies.

Because there is a lot of collaboration via an open API, a data subject may not have a full understanding of where their personal information may end up and how it may be passed on. This is especially the case when the restriction on access to the open API is low and calls into question existing guidelines and practices set for third parties who have exposure to this personal information.

There is a way these companies can reduce some of the existing risks. One, and the most important, is to ensure that the privacy statement is clear and concise and truly leads to this openness agenda. Second, in the use of algorithms, these companies must understand and set ethical standards in the use of these algorithmic formulas in prediction and review the process quarterly or monthly. The security of data, from an administrative and technical perspective, must be clearly described. I must also add that before the development stage, fintech companies must correctly identify and address all potential privacy risks, which means making comprehensive privacy impact assessments and design designs. This is not an exhaustive strategic proposal, but only sheds light on what can be done in the first place.

Michael Irene is a data and information management practitioner based in London, UK. He is also a fellow at Higher Education Academy, UK, and can be reached via [email protected]; Twitter: @moshoke