Why tech vendors must start taking our user data seriously

Onboarding and portfolio management are being enhanced by apps and AI but at what cost?

Why tech vendors must start taking our user data seriously

Like many industries, wealth professionals are facing fundamental shifts in how they operate, providing both challenges and opportunities for firms and individual advisors. There are two indisputable trends, however, that are rapidly converging. Together, they are creating a unique threat to both businesses and clients that may not be readily apparent – the harvesting and misuse of your data by outside technology vendors. 

Changing workplace demographics is a widely covered topic – after all, it impacts virtually every business, from farming to the financial sector. A younger, more digitally savvy employee base is forcing business to innovate and adapt new technology to ensure a more productive workforce. In turn, clients are surrounded by a world made easier and more efficient through digital apps built using ever-advancing AI technology. They are coming to you with exceptionally high and constantly shifting expectations related to everything from how you onboard and administer the client relationship, to the tools needed to help manage their portfolios over time.

The good news is that, in a recent study of Canadian asset managers by KPMG (covered here by Wealth Professional), many in the industry are confident about the future in large part due to the role they feel technology can play in “enhancing operational processes and the use of technology within their organizations.” (Cited by 64% of respondents). The study also revealed that, “when asked where they expect tech investments to have the most impact, 85% cited an enrichment of the client experience; 83% cited improving data governance; and 79% answered with enhanced middle offices and clearing services.”

Recognizing that the need to innovate must happen now in order to remain relevant to your clients in a year, industry professionals are actively seeking vendors and consultants to propel them forward. The technology sector is responding – with an explosion of fintech start-ups offering myriad solutions. Canada alone has seen a doubling of total investments in fintech start-ups since 2018, adding new companies to the landscape at a constant rate. It’s not just small players involved of course – entrenched tech companies like Google, SalesForce, Microsoft and many others are competing to run some or all of your company.

 But as you evaluate your path forward, it is critically important to step back and determine what you’re giving up to rapidly stay ahead.

From a personal perspective, it’s generally understood that using Google, Facebook, and Twitter comes with a compromise - you pay for these free services by allowing them to constantly track your online behaviour, giving up control of your data. They are, essentially, “surveillance companies”.

The majority of websites monitor customers, users, and prospective customers through cookies; small lines of code designed to track a visitor. Companies pay significant amounts to access the information these cookies collect, so they can target them with advertising. This happens secretly, and without an individual being aware, their data has been packaged and distributed to other companies with ulterior motives. What we must recognize is that it happens in the business-to-business (B2B) world as well.

B2B companies allow surveillance companies to track their users while on their properties. Surveillance in the form of trackers can be found everywhere on B2B websites. Salesforce, SAP, WorkDay, NetSuite, and Slack, common applications in today's professional environments, all employ surveillance that track things such as user browsing habits.

B2B companies use products and services from surveillance companies in exchange for their users' data, but users are not informed about it. This practice happens on websites, and it happens on mobile devices. It's everywhere.

But when it comes to your client’s data - your most prized asset – do you feel it should be for sale in a way that you cannot quantify its value. The fact is, it’s priceless, and that’s why safeguarding it should be your greatest responsibility. You must challenge any company that collects and sells user data to stop adjunct surveillance so you can protect - and respect - the privacy of your users.

Ask, is your technology vendor running its products on a public cloud, where they can track you or your client’s behaviour or data. Most public cloud companies also have ad-based business units, and as we know, ads and privacy don't mix. In order to remove trackers from all ad-supported companies, have they developed tools internally? Where are the “Trojan horses” within the confines of their products?

It has been said that data has surpassed oil in value. For businesses who grow by exploiting consumer’s personal data, it’s gold dust. Sure, some things can be monetised; your personal data should not be one of those things, though. All of this brings us to an interesting question. What is legally acceptable and what is morally acceptable? There may not be one all-encompassing answer to that question, but Zoho has made one thing clear: We will not be a part of this industry practice. And we challenge other companies to follow suit.

LSP Chandrashekar is the product evangelist for Zoho Corporation Canada