As the world ushered in a new decade this New Year’s Day, the state of California rolled out a new data privacy law. The California Consumer Privacy Act (CCPA)—which passed in 2018 and went into effect on January 1, 2020—has granted California residents the most comprehensive data protection in United States history to date.
It has also changed how organizations in highly regulated industries should consider marketing compliance. Much like the European Union’s General Data Protection Regulation (GDPR), which was designed to protect the personal data of EU citizens, CCPA could make lasting impact on the financial industry and beyond. Both laws are designed to regulate the access, transparency, and consent of data. As we wrote about when GDPR was enacted, it was wise for businesses to ensure they were acquiring consent for data collection, storing data appropriately, and processing data in a secure way.
The same goes for CCPA. Although the law admittedly only grants rights to residents of the state of California—and only applies to for-profit companies that meet a set of requirements—it could be an indication of what’s to come. In fact, at the time of publication, similar bills are pending in New York, Massachusetts, Maryland, Hawaii, and South Dakota. And some experts consider CCPA a “quantum leap” forward in regards to consumer empowerment and data privacy.
What does CCPA mean for consumers?
From a high level, the law grants California residents the following:
- The right to see the categories of personal data that a company has collected.
- The right to know what kinds of third parties a company has obtained their information from or sold it to.
- The right to see specific pieces of personal information a company has compiled about them, including detailed logs of online activity, physical locations, and ad-targeting data.
- The right to see the specific inferences that have been made about them, including categorizations about behavior, attitude, psychology, intelligence, or abilities.
Among other additional rights, CCPA also grants California residents the right to prohibit the sale of their personal data. Additionally, residents may request access to their personal data online or by phone (and in some circumstances, in person, via email, or postal mail).
What does CCPA mean for marketers?
For financial marketers in California, it goes without saying that CCPA will significantly impact the way that your organization handles consumer information. CCPA was initially drafted to address targeted and behavioral advertising. Therefore, it affects the way that organizations utilize marketing and advertising tactics, especially in the paid realm.
As we’ve written about before, there’s an unprecedented level of data available today. Big data is only expanding. And because banks, credit unions, and other financial organizations leverage transactional data to provide their services, they’re in a unique situation. However, to guarantee compliance with CCPA, it’s essential that financial teams know the following:
- How they’re collecting data
- What types of data they’re collecting
- Where and how data is being stored
Now, more than ever, it’s not only important that banks can find valuable insights from the data they’re collecting—it’s essential that they have oversight over the data sources and types.
How compliance can help improve the customer experience.
Laws like CCPA and GDPR reiterate the importance of remaining compliant. Companies now run the risk of penalization if they fail to adhere to specific regulations. However, data privacy also has a huge influence over customer trust. For example, if a financial brand experiences a data breach, it isn’t just a potential violation of the law—it’s a blow to consumer confidence.
For those financial marketers who view CCPA exclusively through the lens of compliance, it’s time to expand your line of sight. There’s a growing correlation between data privacy and ethical responsibility. And privacy has a huge influence over trust. In fact, your data collection strategy can be leveraged to create a better customer experience.
For example, consumers may not know exactly how your financial organization is using their data. By explicitly outlining how you’re using your customer’s data, you can create new levels of trust in your brand. Rewriting privacy and data-use policies can also help establish trust. This means communicating in clear, concise language about how you’re collecting and using consumer data—and making this information easy to access on your website.
Data can also help financial organizations market relevant products to consumers based on specific life events. In this context, marketing data can help create better customer experiences by creating tailored, customized campaigns. However, as we entered uncharted waters, now’s the time to put in the extra effort to ensure full transparency about how data is being used.
It’s what your customers deserve.
At Workshop Digital, we care about our customer's data collection techniques. As a marketing agency that leverages data to create handcrafted campaigns, we work with financial teams to figure out what's best for your team. For more information on delivering compliant digital marketing services, please check out our guide on the topic.
Disclaimer: Workshop Digital is not a legal firm nor a consultant on legal or regulatory matters. We simply provide digital marketing with an eye toward compliant content and execution. If you believe your team requires the expertise of a legal or regulatory team, please retain those services. This article is not intended to provide legal or regulatory guidance whatsoever. Workshop Digital and its employees are not liable for any company’s legal or regulatory actions.
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