Welcome to the data decade of data protection and exploitation… that’s before we even get into big data

Wealth Management and Private Banking

21 April 2016

Wealth Management and Private Banking


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Sponsor Introducing: Henry Sainty, Farrers & Co
Facilitator: Alex Johnson, Scorpio Partnership

Key message

UK wealth organisations need to keep a closer eye on the new pan-European Data Protection Regulation and the inevitable impact on the UK wealth management industry. The new law is likely to come into force in 2017. With recent data protection scandals hitting UK firms, there needs to be a balance between protection, gathering and crucially exploiting of the data.


Three key areas to consider must be:

  • Handling customer information and the data protection for commercial needs
  • Managing the firm’s reputation through legal and compliance
  • Fair exploitation of data – hold data securely and use data fairly

Key themes

UK companies are at risk of data security leaks and exploitative measures of customer databases, according to a recent PWC report. Firms need to align values and have an “appropriate technical organisation” consisting of the appropriate measures for data protection. Further potential external influences on the industry will come from the UK’s possible exiting of the European Union where data protection ramifications and the size of fines will dramatically increase. Key factors that firms should focus on are:

 Internal training

  1. In-house staff
  2. Tangible policies that people understand
  3. Instating Chief Data Officers
  4. Outsourcing is core to the evolution of this data generation of wealth managers

For the fair use of private data, clients must give consent. What is crucial is the necessity of giving clear consent. Ensuring this correct process is in place is therefore particularly relevant to client acquisition programs where the discovery and exploitation of data and information is pertinent.

This begs the question, how best to use the data once it has been ‘acquired’. Capturing as much binary data along with free form data is essential. This gives a firm the ability to measure the data and then it can be interrogated and analysed.

In the context of where this information can come from, social media is an acceptable method, as is further voluntary public information. However, what is not acceptable is the colluding of data and where the data has been acquired, the trading of data leaving a data trade chain. Each of these positive methods requires the appropriate information to be augmented in the best way.

There are no specific industry data policies for prospecting clients. With this in mind, alongside the numerous benefits in place for relationship managers to use public data to acquire clients, managers have to be careful to handle the right versus wrong information. As such, the risk of data protection exploitation is high.


  • Crucial to the development of client data is how this information is stored and warehoused. Data storage is fundamental to policies around data protection.
  • Collecting end client information through know your client (KYC) processes will over the longer term, give RMs and the firm greater depth of knowledge around the client base.
  • Adding on further digital capabilities around exploiting this information through online portals will give collateral for marketing purposes, client on-boarding purposes and crucially client experience purposes.