Financial institutions are sitting on a goldmine when it comes to privacy, handling sensitive payment data every day.
With strict financial regulations to comply with, financial institutions are already well aware of how to safeguard data, but they could harness further opportunities to go beyond just ticking regulatory boxes. Financial institutions can turn their privacy knowledge into a stand-alone offering for merchants, specifically those who may not have the resources or know-how to navigate the complex world of data privacy.
For those in the financial services industry or those who manage online payments, there are ways to develop and offer privacy as a service as a value-added service. This could help grow business, build stronger business partnerships and offer an essential layer of trust to consumers.
Leverage existing expertise to offer privacy consultancy
With a deep understanding of privacy regulations like the EU General Data Protection Regulation, California Consumer Privacy Act and more, why not offer this expertise to merchants who might not be as familiar? Most businesses don't have dedicated privacy teams, especially small to medium-sized entities, so there is a gap to be filled.
Offering regular audits for merchants to identify gaps in their data protection measures will not only help them avoid privacy fines, but also build their confidence in your service.
Every business is different, so creating tailored privacy strategies can help each merchant comply with local and international laws while aligning with their business model.
Setting up webinars or workshops to educate merchants and their teams on privacy best practices could cover everything from secure data handling to consent management.
Develop privacy tools for merchants
Merchants want plug-and-play solutions. They don't have the time or expertise to manage complex privacy systems. That's where financial institutions could offer ready-made privacy tools that integrate easily into their businesses.
Consent management platforms help merchants gather, track and manage user consent for data use, helping them stay compliant with privacy regulations.
Data minimization tools ensure merchants collect only the data they need. For example, they can automatically anonymize customer data to reduce risks associated with storing sensitive information.
Automated data deletion and retention policies help merchants manage the life cycle of the data they collect, from retention to deletion, without manual intervention.
Integrate privacy dashboards for consumers
Consumers today want transparency and control over their data. Offering merchants a way to give this to consumers goes beyond compliance and builds trust on both sides.
Financial institutions can help merchants allow customers to see what data is being collected and request access to it, fulfilling key GDPR, CCPA and other requirements.
They can also help merchants give customers an easy way to revoke or modify consent for marketing communications, data sharing or other uses.
Also, helping merchants make it easy for consumers to request data deletion not only builds trust but also reduces the legal risks associated with holding on to unnecessary data.
White label privacy solutions for e-commerce merchants
Not every merchant has the resources to build privacy solutions from scratch. Merchants can brand white label privacy tools as their own, while relying on the financial institutions' infrastructure and expertise.
Providing merchants with templated but customizable privacy notices saves them the cost and hassle of hiring legal consultants.
Secure shopping cart features, such as masking payment details and protecting sensitive information, can enhance the consumer experience in addition to keeping data safe.
There are also other specific privacy tools for merchants running loyalty or subscription services, managing customer data preferences and obtaining consent for promotional material.
Offer privacy-centric payment solutions
Financial institutions already handle payments. Building privacy-first features directly into payment solutions could give merchants an edge by appealing to privacy-conscious consumers.
Replacing sensitive payment data with tokenized versions that do not expose actual card numbers or personal information minimizes the risk of fraud for both merchants and customers.
Going a step further by offering transactions in which sensitive details are entirely hidden from the merchant can ensure the highest level of customer privacy.
Integrating end-to-end encryption for sensitive customer data during checkout can help ensure personal information stays protected while completing transactions.
Partner with third-party privacy tech providers
Partnering with privacy-focused technology companies can enable a more comprehensive suite of services without a heavy lift.
Offering merchants anonymized or aggregated data insights that comply with privacy laws can help them make business decisions without risking customer data.
Implementing third-party identity verification services can ensure secure, privacy-compliant customer authentication.
And working with certification bodies to offer merchants privacy certifications, such as GDPR seals, can enhance credibility with consumers.
Turning privacy into a distinct service and a growth engine
In a world where consumers and businesses alike are hyper-focused on data privacy, financial institutions are uniquely positioned to offer privacy as a service. By leveraging existing expertise in data security, building merchant-friendly tools and offering white-label solutions, privacy can be transformed from a regulatory obligation into a growth engine.
Not only will this help merchant clients stay compliant, it will also differentiate them — and financial institutions — in a privacy-conscious market. Ultimately, this positions financial institutions as more than just payment providers, but as trusted partners in navigating the complexities of data protection while driving long-term business success.
Gabriela Dascalescu, CIPP/E, CIPM, CIPT, FIP, is the data protection officer for Europe, the Middle East and Africa at Verifone.
