Leverate’s Adinah Brown takes a good look at The General Data Protection Regulation and how brokerages can use business intelligence and marketing tools in order to remain compliant
There is no denying it. Good marketing is a form of art, where the objective is to forge an affinity with your brand amongst your target audience. Obviously, it should go without saying that the number one rule should be “Do Not Annoy”. And yet how many times do marketers tip the scale well beyond “raising brand awareness” to become a down right annoyance with frequent emails and intrusive phone calls?
Customer affinity and loyalty is gained the long way, not the short way. By demonstrating to clients that you are there to solve their problems, not by creating new ones. Start paying attention to when, how and why your leads want to engage you and gradually by serving those needs, the perception of trust and care is established by your most important asset – your clients.
Precisely for the purpose of supporting and protecting clients has the European Commission passed legislation on the privacy rights of individuals. The General Data Protection Regulation (GDPR), is a wide scoping piece of legislation that went into effect two years ago and is due to become enforceable as of 25th May 2018.
An overview of GDPR
GDPR pertains to anyone who conducts a business with stakeholders in Europe. It has a very broad ranging scope, so whether you are a butcher, a baker or a candlestick maker, this legislation pertains to you and the way you collect information about your clients, leads, employees, contractors – basically, everyone. At its core it aims to strengthen the data protection rights of EU citizens across a range of objectives. Here are a few of the most pertinent aspects of the law.
Area of marketing practice: Collection of personal data and the requirement for consent before compiling and utilizing client data for marketing objectives.
Relevance outside of the EU: GDPR applies to any company inside or outside of the EU bloc, but is still collecting personal data of EU citizens. In marketing this comes down to tracking the purchasing behavior of potential clients.
The implication being if you do any form of business in the EU, whether you are a Chinese based brokerage, selling American based financial instruments, licensed by ASIC, but to a European based audience, GDPR applies to you.
Ramifications of noncompliance: This is not really an option that you can consider too seriously as the repercussions of breaching the laws of GDPR are severe. Companies in breach of the regulation will be penalized up to €20 million or 4% of annual net profit. The determining factor being the amount that is higher.
If this does relate to your brokerage, than you need to ensure that you have sufficient legal advice to know how GDPR will affect your ongoing operations.
Consent is a major aspect of GDPR that is relevant to marketers. In this case “consent” refers to “a clear affirmative act” of communication that establishes the “informed and unambiguous consent” of customers. A clear affirmative act refers to express permission or an active opt-in.
However if your company is collecting sensitive personal data for the purpose of profiling activities or to conduct cross-border data transfers, than a higher level of explicit consent is required.
This information which includes physical or mental health status, racial or ethnic origin, trade union membership etc, can only be provided through more intensive means of providing consent, such as double opt-in or by approving cookie notices.
While GDPR legislates for the provision of client communication preferences, it also legislates for the ability to provide a change of preference. To comply with this requirement, companies, and specifically their marketing departments, need to understand that client interests change over time as do their purchasing preferences. Therefore they need to make it easy for clients to register any changes of preference, at any time.
While it’s one thing to gain consent, GDPR is likewise focused on accountability and the need to demonstrate how any customer data collected, stored and used, complies with its principles.
As GDPR implementation has been a long time in the making, many companies have already implemented pro-active data processes and incorporated the requisite technology to ensure compliance.
Seize the challenge to grow
Has your company started addressing its status in meeting GDPR compliance? Are you currently in the process, but are continually meeting road blocks?
To help brokers navigate through these unchartered territories, Leverate offers marketing and business intelligence tools along with regulation services to help ensure compliance. But at the end of the day, as long as your company’s orientation is focused on building customer relationships, GDPR will be the proof of practice that demonstrates your brokerage’s trustworthy operation.