For years, among jurists, the new digital platform that would revolutionize the legal world, since it was going to be mandatory for all professionals that were related to the administration of justice: Lexnet
Thus began the long path of the “era of digitalization”. Several years later, we are fully within a network of data and metadata that impact us on our day -to -day profession.
Indeed, adaptation to new technologies is of vital importance for all sectors, including that of companies dedicated to debt recovering, the automation being the key to digitalization. The implementation of technologies such as AI and Machine Learning They allow to customize charges strategies, identifying common behaviors to certain types of debtorsthus increasing the effectiveness of debt recovery, reducing management times, giving optimal customer service that wants a fast judicial process and cost reduction.
A question nothing trivial if one takes into account that delinquency is a critical indicator of financial performance for banks and Fintechs and the financial health of a country. Specifically, according to a report by the consulting firm Gloval and Prime Yield with figures from the European Banking Authority (EBA), the banking entities total 76.2 billion euros in these loans, with data until the middle of the year 2024. The report forecasts, in addition, That this year Spanish financial entities will close operations for the sale of doubtful loan portfolios for 22.3 billion.
In this context, The latest technological advances are marking a new era in mitigation of credit risks. However, this transformation also brings with it a series of legal challenges that must be taken into account to ensure effective and ethical functioning in an increasingly competitive environment.
Digitization faces us to the challenge of managing large volumes of files. Therefore, one of the great challenges of debt recovery companies is to implement adequate security measures in data protectionsince, breach of these standards can generate severe sanctions and affect the company’s reputation. The General Data Protection Regulation (GDPR) in Europe, complemented by the Organic Law of Personal Data Protection and guarantee of digital rights (LOPDGD) classify these sanctions in mild, serious and very serious depending on the infraction committed, reaching the slight the amount of € 40,000; The serious ones, from € 40.001 to 300,000 and the very serious from 300.001 to 20 million euros or 4% of the company’s annual billing volume, imposing in this case, the one with the greatest amount.
To name some examples of companies that have been sanctioned in recent years, we could talk about giants such as Amazon, with a sanction of 746 million euros imposed by the National Commission for Data Protection of Luxembourg in 2021; or WhatsApp with a fine of 25 million euros, imposed by the Ireland Data Protection Commission in 2021. Only in Spain, we can quote Vodafone Spain with a fine of 8.1 million euros in 2021, to BBVA with a fine of 5 million euros in 2018 or Caixabank with a fine of 6 million euros.
Among the reasons for these sanctions include the breach of the requirements of free and informed consent, the lack of solid base when transferring the data to other entities or the commission of infractions in electronic and telephone communications with customers where not always There is prior written authorization to deal with certain data.
In order to avoid these high sanctions, among the measures that companies must carry out we can list some such as encrypting the confidential data; Make backup copies periodically; implement an incident response plan; have a CMP or consent management platform; o Incorporate a delegate in data protection to the template that watches over compliance with the regulations, etc.
Given the obligation of Comply with data protection regulationsit should not forget that it is necessary to implement an internal security system that adapts to the Fintechsince thanks to the payment facilities that digital platforms offer us, we must verify that, indeed, the payments made are safe and that there is no risk of possible fraud. In this sense, digital payment platforms are vulnerable to BIN attacks (bank identification number), since a filtration in their systems can have a damage to companies and their customers; They can also suffer from personal data, attacks of Phishing or of malware introduced into the payment infrastructure. This can be avoided through behavioral analysis, tokenization and data encryption, the use of 3D Secure 2 for the realization of online transactions and, as we have previously pointed out, through the figure of the data protection delegate in this type of companies for the realization of a security measures plan adapted to current regulations.
In short, the digitalization and automation of processes brings considerable advantages for the efficiency and development of the sector, by improving the experience with the client and positioning ourselves as a good market competitor. But this also implies a series of challenges that we must overcome so as not to stay behind. There is still a long way to go, but we must bear in mind that the key to everything is to achieve the balance between a good digitalization proposal that allows us the correct compliance in data protection and through which we provide the greatest security to the data with those we work.
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