Financial technology, or Fintech, has experienced significant growth, and more consumers and businesses will likely utilize fintech applications for lending, investment, and crypto apps. As more consumers have accepted and integrated Fintech into their lives, the amount of industries that fintech has touched has expanded. As the industry evolves, expect regulations and laws to emerge because fintech companies hold a significant amount of their consumers’ sensitive information. For example, every state now has its own laws and regulations regarding how companies report data breaches. This is just one example of why fintech companies must remain compliant to allow the industry to continue evolving.
Many laws and regulations exist to prevent data breaches and cyberattacks to ensure that financial institutions that only exist virtually still have the licenses required to perform the functions of a typical bank. Any fintech company has to be aware of these regulations and incorporate preventative measures into their applications. The consumer who decides to use your app to deposit money, apply for a loan, or even purchase cryptocurrency should not have to take any additional steps to protect their personal data. This is a system known as privacy by default, and it is the responsibility of the fintech company to build this into their platform. This should not be confused with privacy by design, though it is equally important. Privacy by design refers to the protection of consumer data in terms of how it is stored, gathered, used, or disposed of.
Fintech companies must embrace that the terms “privacy” and “security” are not synonymous, and the company is responsible for providing both for their users. Consider the company that offers a way for people to send and receive money. This could be a transfer between two private citizens or between a consumer and a business. Privacy speaks to how the consumer’s data will be used. Security speaks about how safe their data is from outside actors who intend to steal it. As a fintech company, you should not choose a system or platform that favors privacy over security or security over privacy. They can co-exist, and your users demand both from you. Furthermore, having these built into your application will only enhance your ability to comply with new laws and regulations governing the fintech industry.
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Inceptiv Law, Inc works closely with emerging technology companies, including fintech, biotechnology, and software developers. Although we have a background serving tech-based businesses, we also have a strong command of the demands of a high-growth company. You will no longer fear the complex legal hurdles in your path because you will have us supporting you. Contact us today to schedule your consultation.
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