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Ten tips for keeping your finances safe

The use of smart phones, social media and other connected devices means we are generating more and more data in our daily lives. As banks, insurers and investment managers find new ways to use this data, it’s important to be aware of the effects it might have. In part three of our series on the ethical use of big data, ICAEW shares 10 tips for consumers to help you keep control of your information and how it is applied.

  1. Don’t do anything online that you wouldn’t do in public

  2. People can be less discreet online and the boundaries between public and private are less clear. Before you use that home DNA kit or take a selfie for a celebrity look-a-like quiz, think about how you would feel if that information is sold on or becomes part of what determines your access to credit or insurance in future. You’re feeding the body of online data and helping to refine algorithms that may already (or soon) be part of underwriting information.

  3. Be mindful of “sharenting”

  4. Sharing information and images online about your kids (sharenting) might not only embarrass them in the future, but could affect their financial profile. It may also mean they are more vulnerable to fraud, Barclays warned in 2018. The simplicity of some security and identity questions (such as date of birth or mother’s maiden name) means answers can easily be pieced together from otherwise innocent social media posts. We also don’t know how banks and insurers will deal with children’s digital footprints when making decisions about them in future.

  5. Use two-factor authentication

  6. Two-factor authentication provides additional security when accessing your account, by asking you to confirm your identity using different methods or questions. We already use this in everyday life, for example, logging into online banking, which requires your password and an authentication code from your smartphone or card reader. It is increasingly available for other apps and services and can boost security when you may be sharing personal data.

  7. Have a separate email address for your finances

  8. This makes it easier to stay organised and to spot unusual activity when dealing with credit cards, bank accounts and insurance. It can also help maintain your privacy on social media and in other online interactions, and provide a back-up if another email address has been compromised.

  9. Read the terms and conditions

  10. We don’t all read the terms and conditions and sometimes just scroll down to tick “yes, I agree”. However, if you’re going to be sharing a lot of personal information, it’s important to know what you’re consenting to. For example, in 2012 Instagram was criticised for introducing a new term stating: "You agree that a business or other entity may pay us to display your username, likeness, photos (along with any associated metadata), and/or actions you take, in connection with paid or sponsored content or promotions, without any compensation to you". It was later removed.

  11. Don’t assume that you have to share “real” information

  12. Sharing data can have immediate benefits, such as receiving faster free Wi-Fi in exchange for your name, age and address. The costs are less clear. Use a separate or non-descript email address where no verification is needed purely to access public Wi-Fi and other services. Stepping back and asking yourself what the information is for, and whether you need anything from that service provider in future, can help identify what is needed.

  13. Consider whether artificial intelligence (AI) is being used

  14. If a three-question online form seems to replace a multiple page life insurance form, big data and AI are probably being used to support underwriting. Basic information supplied will be used to build a customer profile, in addition to digital data, including from credit referencing agencies, social media and other sources. Compare prices and terms carefully as this is new territory for fair pricing and customer outcomes, such as whether you’re accepted for a loan or the amount of cover you have under an insurance policy.

  15. Know that banks and insurance companies are “listening”

  16. Social listening is when companies monitor what people are saying about specific products, services or topics. Barclays used social listening to improve its PingIt service. Legal & General raised brand awareness by joining social conversations about financial worries. Social listening may help existing customers, but how information about them is used will continue to evolve.

  17. Don’t be nudged into overspending

  18. Big data will mean more offers and discounts being sent to consumers, but the goal is for you to spend, not save. Credit card companies use data to target customers, such as with offers for shops and restaurants near them in real time. You might feel like you’re saving money, but may end up spending more.

  19. Use data to your own advantage – switch

  20. From price comparison websites to open banking, there are plenty of opportunities to get access to products and services, potentially at lower prices or with better rates or coverage, if you’re willing to share the requested data. However, when you’re looking at new providers and companies, make sure they are legitimate. Check that they are registered with the relevant regulator and what protection you have when using their services. For example, just because you are offered an account, this does not mean the organisation is a bank and you may not be protected by the Financial Services Compensation Scheme if anything happens to the business.