What to Consider Before Sharing Your Financial Data

Data security is of the utmost concern for small business owners, particularly when it comes to financial information. Though you likely protect sensitive personal details, including your Social Security number, bank account and credit card information, it’s crucial to safeguard your business’s confidential data as well. Read on for six considerations to look for before sharing sensitive financial details.

1. Reputability

Before sharing any financial data, make sure that the company, app or platform requesting your information is reputable and trustworthy. If you’re unsure, research the specific institution that is requesting sensitive financial information beforehand. Look for customer reviews on third-party websites and/or app stores in order to learn about real customer experiences.

2. Data Security Measures

The establishment requesting your business’s sensitive data should have reliable security measures in place. Financial services, including digital banks, online lenders and payment software, are required to follow industry regulations in order to protect sensitive data. As a result, they may use a multi-layered approach to safeguard confidential information. Such measures may include:

• Secure connection: If you’re using a browser, make sure the website you’re visiting has a secure connection, which is typically denoted with a lock symbol located near the URL field. Avoid accessing or transmitting sensitive data over public or shared Wi-Fi.
• Latest software: Whenever possible, use the latest version of the app, service or product. Software developers occasionally update their software to enhance security and/or apply other important safety measures.
• Encryption: Aim to only work with companies that employ end-to-end data encryption in order to shield confidential information.
• Multi-factor authentication: In addition to your password, multi-factor authorization adds another verification step to complete when logging in to your account to prevent unauthorized access.

3. Data Storage Policy

Banks, lenders and other financial service providers may store sensitive information for a specified time period. Before you provide any protected data, it’s a good idea to review the company’s data storage procedure, typically found in the privacy policy. Take note of how long your information is stored as well as the storage method.

4. Whether Your Information Is Shared

Financial establishments may utilize other technology in order to enhance security, expedite data transmission and add convenience to the overall customer experience. Reputable companies should clearly indicate whether your information will be shared, as well as provide the specific partner. OnDeck uses Plaid, a secure data transfer service, for a fast and reliable application process. Plaid protects your data with industry-leading security measures, like end-to-end encryption, multi-factor authorization, independent testing and other methods. Learn more about Plaid.

5. Reason for Sharing Information

Financial service providers like online lenders, budgeting apps and banking technology should disclose the reason(s) why they’re requesting and/or using your data. In general, the information you provide should align with the purpose of the service or product. For example, lenders generally request business loan applicants to provide a number of documents, including bank account statements, routing numbers and even personal financial information of authorized signees.

6. What Data Is Requested

Similar to the consideration above, the requested information should also be within the scope of the service. Although some data may be used for verification purposes, including your address, Social Security number and email address, the entity requesting your financial data should clearly state the purpose(s) in which it will be used. If it’s unclear why a company is requesting sensitive data, refrain from sharing your business’s financial information.