Why fintech startups should care about (un)Safe Harbor

Jonathan Lister

by , CTO

07 Oct 2015 /  

07
Oct 2015

Why fintech startups should care about (un)Safe Harbor

There is a new buzzword in my life: fintech. And it would seem it’s not just me - many promising new financial technology initiatives are getting going in London. In my naturally unbiased opinion, PensionBee is undoubtedly the one to watch.

Fintech today is all about money - more precisely, the financial future of the customer. Protecting the personal data of those customers is a huge part of gaining trust and reliability as a startup.

Most startup teams don’t include a legal expert amongst their numbers, and fintech startups are no different. So many may have missed October’s news that the EU’s highest court has ruled that the Safe Harbor Framework, which permitted companies within the US to accept and process personal data of EU citizens on behalf of EU companies, is invalid.

This framework has been in place since 2000 and, due to the increased use of cloud computing over the last 15 years, the ruling affects almost every company doing business today, not just the giants like Facebook that were mentioned in the press.

How many fintech startups are planning to take action to remain compliant under EU law?

At PensionBee, we decided that it was important to have a lawyer in our founding team. As soon as the court ruling was released, we were on top of the need to review our cloud service provider contracts and privacy policies. We signed up to new terms compliant with the EU ruling with a key supplier and we updated our privacy policy. As the supplier network and the UK government responds to the ruling over the coming months, we will be taking stock and staying on the right side of the law.

You don’t get this level of legal agility without investing in an in-house lawyer or an excellent outsourced legal team. Since a fintech product is effectively a legal product, you can’t get by without it.

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