When it comes to managing finances, tracking cash flow and recording business activity, today’s digital solutions are a big improvement on old analogue ways. But what about the security of all that data flowing back and forth?
As a business owner, are you aware of the risks associated with data sharing? Have you ever declined to share data about your business?
To confidently choose a trustworthy digital service, and make sure you don’t lose control of where your data ends up, you should consider these factors:
The new world of data-driven business apps
Many small business owners use online banking and accounting software to manage their finances. This lets businesses generate accurate views of crucial areas like cash flow, no matter how busy they might be with the day-to-day pressures of running the business. This is becoming even more common with the simple access of offerings like Lloyds business banking app, and service pair-ups like the one between RBS and FreeAgent.
It may seem like great news all-round. However, not everyone has a strong understanding of how these services work – especially the free ones. And when it comes to data security, this is crucial.
If you’re not paying, you’re the product
Why is a service free to use? Invariably, it’s because the provider can collect valuable data about you.
By sharing data about your business with a digital service, you might get some useful outputs, but you’re also giving away a wealth of business intelligence. What happens to that potentially sensitive business data? Often, it’s hard to know – it simply disappears from view.
Recommendation: ask service providers directly what happens with the data held about your business. In addition, head over to the ICO and review their resources that help you be data aware.
Who can access your data?
Increasingly, your data is one of your most valuable assets as a business. You wouldn’t leave documents detailing your finances lying around in public – and you need to take a similar level of precaution when it comes to sharing your business data with apps and websites.
When you set up an accounting software programme and you can now grant access to your business bank account information.
Recommendation: Many small business owners get software via their accounting firm. It’s a great way to get help with the initial setup, but be sure to conduct a regular review of all users that have access to your bank or accounting software.
While many of the most popular options are entirely secure, some free services are trading on your data. Alarm bells should ring if the service asks you to give them your online banking username, password and other credentials. This information should only be entered when prompted by your bank. Instead, your information should be transferred securely using an API. And by authorising access using APIs, it is also much easier to revoke access once it is no longer needed
What is an API?
API stands for application programming interface. APIs make it possible for a company’s software to access information from the software at another company. For example, many apps use Google Maps API to provide directions, rather than building that capability from scratch. And it’s these interfaces that allow for the secure transfer of encrypted financial data too.
It’s worth investing in security
You need to evaluate the security of your data, but nobody expects all business owners to know their APIs from their SSL certificates. So it’s more important than ever to have someone in your business who has the requisite knowledge. Alternatively, you can look for help from business support organisation such as the Federation of Small Businesses’ Cyber Protection or even your insurance company.
Convenience and security are not mutually exclusive. You simply need to know what you’re looking for.
Putting you in control of your data and your finances
At Finpoint, we use APIs to transfer your application data to potential lenders. But that’s only the first step in keeping your information secure.
First, we anonymise your data before sending it to prospective lenders. Once you find a lender you want to negotiate with directly, you can choose to reveal additional details.
If you don’t reach an agreement, no problem – you can terminate their connection to your data. Your valuable financial information is locked-down and won’t be sold or exploited by us.
How we help
Finpoint is free to use. We’re 100% transparent about fees and rates, and give you access to the UK’s largest panel of business lenders. We’re also 100% independent. Our only interest is to make it easier for you to consider different funding options and to find the right funding without pressure.
Want to know more? Speak to us about funding or your financial planning needs.