Breaking free from data traps: How users can regain control

By Amit Das, CEO and Co-founder of Think360.ai

Data over consumption, a seemingly alarming phenomenon that operates under the hood, has pushed the entire generation towards something known as data traps. It inhibits people from making concrete decisions and fogs reasoning by dumping too much information.

Data traps refer to the phenomenon of being overloaded with so much information that it impedes someone from absorbing the insights and implementing the learnings in real life. Whether it’s Facebook newsfeeds, email inboxes, or even just random social media posts, companies and platforms hunt for ways to provide users with the information they want while gaining an all-pervasive existence in their lives. The users feel like they are more “aware”.

One such phenomenon with significant financial impact is how users engage with lending fintechs. The internet has radically transformed the way we communicate and transact. A simple act like looking for a loan throws up a large number of options, with profound obfuscations hiding the real truth behind the various terms and conditions. In addition, many digital lending apps (DLAs) are information predators. A common man ends up sharing more information than required or realised, sometimes without their explicit consent or understanding, and is bound by privacy policies and loan agreements that he doesn’t understand; occasionally, they may have sensitive information like credit card numbers stolen by hackers, are tricked into signing up for fake services that harvest their personal information. These come as a part of being unable to distinguish something real from fake, raising serious concerns in the process. In the recent digital lending guidelines by the Reserve Bank of India, there are enough reminders of what is the right and not-so-right behaviour by many unauthorised DLAs.

So how does one break free from data traps and regain control of their online lives (and their digital data)?

We have all experienced being bombarded with ads and targeted content online. It can feel overwhelming and intrusive, making us feel trapped. But what can be the possible solution? How can users take control of data and use it on their own terms? To break free from these data traps, users must take a step back and evaluate one’s online behaviour.

Share what is absolutely essential for availing the products or services, and only with the rightful businesses. As digital consumers, we regularly share our data with social, eCommerce, and fintech apps. We do this because we want to use their services and take advantage of their features. However, not every such data sharing is mandatory or “essential.” For example, users should be careful with giving an app access to their media files unless it provides specific functionality linked to the used camera or is required for uploading or downloading files on a user’s device. Online, your primary approach should often be to ask yourself – do I really need to provide this access? If denying permission makes an app not functional, and the app is not ready to provide adequate prominent disclosures about the use of the data, it is often advisable to look for other alternate apps that might be providing similar services.

What do we share?

This is the first and most important baseline. We must understand what data we share online.

The first and foremost is access and permissions given to different mobile apps. These may include location, contacts, call logs, device information, messaging, camera, microphone, etc. All of us understand the sensitivity around this information – for example, does an app that does not provide delivery or pick-up service really need to know my friends’ contacts ? How does having access to contacts data help this particular app provide me services?

Similarly, while browsing the web, most websites request cookie permissions these days. It is absolutely essential to take a moment and switch over to “essential” only permissions unless we believe that the personalisation and tracking by this app is something we are comfortable with.

Additionally, many websites allow us to sign up/ sign in using our social logins, such as Google, Facebook, etc. However, before we accept their authentication request, we should carefully look at the information they are collecting from the underlying platform. If we are not comfortable, it is advisable to switch over to manual/email-based logins with secure passwords.

We often advise users to set up alternate email ids for signing up with services that they do not intend to use frequently – similar to a post box id, where we do not retain sensitive information.

Lastly, it is imperative to be aware of policies introduced by regulatory bodies to safeguard and respect users’ privacy. Always be aware of who you would need to reach out to if the company does not keep their end of the bargain.

RBIs Digital Lending Guidelines and Data Traps in Fintech Lending

Anonymity or not, today, data breaches have increasingly become more common. Consequently, users are at an increased risk of having their personal data harvested and used without their consent.

Additionally, illegitimate digital lending apps (DLAs) are also on the rise. These apps often trap users into costly loans with high-interest rates, high processing charges, and exorbitant penalties. This leads the users to find themselves in a cycle of debt and harassment. DLAs might be tempting to try out because they often present themselves as safe and faster alternatives to banks, but they may not be safe havens for data security and may not follow transparent lending processes.

The Reserve Bank of India’s (RBI) guidelines on digital lending are a welcome move in protecting users from data traps and curbing unlawful lending practices. The guideline states that lenders should use data only for the purpose it was collected, companies can share data with third parties who need it with the prior explicit consent of the borrower, and data collected should have clear audit trails.

The guidelines also recommend providing an option for borrowers to accept or deny the consent for the use of specific data, revoke previously granted permission, and option to request deletion of data provided to DLAs.

Lastly, before you take a loan from any app, it is absolutely essential to know the exact underlying financial institution that is giving you the loan. These names can often be looked up online to see if they have the right RBI license to be giving you loans. Make a note of their grievance officers in case you find any adverse behaviour from these later on in the loan.

Key Takeaway

What seems too good to be true usually isn’t. Users must not compromise their mental piece when taking quick approvals and disbursals. There is no doubt that data has hidden profound insights which help companies serve you better. However, users need to be cautious with increased data breaches and the rise of illegitimate digital lending apps (DLAs). A well-defined regulatory framework on various aspects of data sharing and prudent financial behaviour help users regain control and break free from data traps.