2018 was a year marked by a number of high-profile data privacy scandals. These resulted in a consumer trend focused on data privacy awareness and concerns. In parallel, a regulatory trend focused on data privacy protection resulted in the implementation of GDPR. As a case in point, a DataIQ survey revealed that the majority of customers do not expect to share their data when using services. In addition - although focused on the US market - two thirds of surveyed respondents are very or extremely concerned about data privacy when using FinTechs.

Could the convergence of the consumer and regulatory trends - resulting in data minimalism - signal a danger zone for Fintechs' business models viability? Yes, insofar as it could:

  • prevent FinTechs from improving their algorithms;
  • negatively impact the commercial relevance of products and services; and
  • reduce the capacity of FinTechs to optimise costs.

One way of protecting themselves from entering this danger zone, is for FinTechs to develop their products and services on a “privacy by design” principle. That is, data privacy is taken into account throughout the entire engineering products and services process.