Privacy Management is a Crucial Part of Money Management
Disclaimer: The following is a sponsored blog post.
Not so long ago, personal money management consisted chiefly of keeping savings and current accounts at a brick-and-mortar bank you trusted unreservedly, and if you had any money left over to invest, socking it away in reliable stocks or other securities with the help of an equally trusted broker. If you controlled your spending and kept up with your bills, you were managing your money. But today, with the explosion of Internet banking, alternative financing, and a host of new investment vehicles, it’s a whole different world. And managing personal finances in this increasingly complicated world isn’t always easy.
Technology has emerged to make all of it easier for us, at least in theory. A paperless, “frictionless” and even cashless world seems to be just around the corner – or perhaps it is already here – bringing with it handier methods of payment, fund transfers, stock transactions and just about anything that involves the exchange of money.
We love the convenience of being able to wave our smart phone or smart watch in the vicinity of a small machine on a counter at our favorite high street store; it’s so much easier than fumbling through our wallet for cash or writing out a check. We like being able to keep tabs on our bank balance wherever we happen to be, at any hour of the day or night, without making a trip to the bank or waiting for a paper statement to come in the post. But technology, like so many good things, is a two-edged sword, and we are paying a price for all of that convenience.
The privacy trade-off
The uncomfortable truth too many people have discovered the hard way is that the more convenience technology creates for us, the more convenience it affords those who have an interest in snooping around in our private business. Sometimes the snoops are bad guys who would steal our money, our identities or our very lives, but sometimes they’re the presumed “good guys” who claim to be protecting us from crime and terrorism. In any case, technology has made our most sensitive data vulnerable in ways that the trusty old bankers and stockbrokers could scarcely have imagined.
Finance has been one of the last bastions of privacy, and it’s one that is rapidly eroding. This point was highlighted in a major way via the notorious “Panama Papers” leak. Although in some ways this spilling of terabytes of data was a boon because of the light shed on international crimes that go well beyond tax evasion, it also drove home the point that none of our own financial data are totally safe.
For example, you’re probably impressed by that nifty gadget at the cash register that lets you pay for goods by merely waving your card or smartphone over it. But did you know that the bad guys have already come up with portable scanners that allow a dishonest cashier or the person behind you in the checkout line to scan your information at the same time, without you knowing they’ve done so? If you get scanned this way, and if you’re lucky, the person behind you will only use your account to pay for their own purchase. You might be out a couple hundred dollars, but it could be worse. Much worse. They could also use the information they stole from you to set up a new false identity, and spend you into credit hell, spending thousands of dollars at merchants throughout the world. You wouldn’t get the products, of course, but you would certainly get the bills.
A solution that isn’t really a solution
In February 2016 the European Commission, attempting to allay some concerns about data compromises, proposed the so-called EU-US Privacy Shield to govern personal data transfers between the EU and US. From the beginning the proposal had its critics, partly because it wasn’t set to go into immediate effect, and also because of its ambiguity of language and intention. The critics noted that it was an outdated as well as an inadequate “solution”.
A better alternative for safer data handling, and one that’s available now, is to store data in the cloud and encrypt the transfer of that data so that only the authorized parties can access it. In-country and in-region data residency in the cloud is a practical and inexpensive solution for individuals as well as many small businesses. Perhaps more relevant to our point here, the Privacy Shield doesn’t really address the ongoing privacy issues faced by most of us as we go about our daily lives.
How can you protect yourself?
The fight for privacy may seem like a losing battle, but there are still things you can do to protect yourself. If you’re one of the millions of people who conduct most of their personal business, including financial transactions, on your smartphone or online, those are the first areas to address. While it might be more convenient for you to fill out and store personal information on your smartphone or on business web pages so you don’t have to re-enter it every time you shop, it can also be much more convenient for those who would steal that data for their own illicit use. Keep that in m mind and store personal information discriminately, if at all.
As technology grows and evolves, the hackers and snoops will find new ways to compromise that technology, so it’s crucial that you keep current on ways to foil them. The burden is really on you to protect your financial privacy, whether you’re managing your own money or running a business. It’s worth taking a few extra steps to make your data as secure as possible, because the cost of not doing so can be much higher than you are willing or able to pay.