Promise Not Fulfilled: Fintech Data Privacy, and the GDPR

51 Pages Posted: 28 Oct 2021

See all articles by Gregor Dorfleitner

Gregor Dorfleitner

University of Regensburg - Department of Finance

Lars Hornuf

University of Bremen - Faculty of Business Studies and Economics; Max Planck Institute for Innovation and Competition; CESifo (Center for Economic Studies and Ifo Institute)

Julia Kreppmeier

University of Regensburg - Department of Finance

Date Written: 2021

Abstract

This article analyzes how the General Data Protection Regulation (GDPR) has affected the privacy practices of FinTech firms. We study the content of 308 privacy statements respectively before and after the GDPR became binding. Using textual analysis methods, we find that the readability of the privacy statements has decreased. The texts of privacy statements have become longer and use more standardized language, resulting in worse user comprehension. This calls into question whether the GDPR has achieved its original goal—the protection of natural persons regarding the processing of personal data. We also analyze the content of privacy statements and link it to company- and industry-specific determinants. Before the GDPR became binding, more external investors and a higher legal capital were related to a higher quantity of data processed and more transparency, but not thereafter. Finally, we document mimicking behavior among industry peers with regard to the data processed and transparency.

Keywords: data privacy, FinTech, General Data Protection Regulation, privacy statement, textual analysis, financial technology

JEL Classification: K200, L810

Suggested Citation

Dorfleitner, Gregor and Hornuf, Lars and Kreppmeier, Julia, Promise Not Fulfilled: Fintech Data Privacy, and the GDPR (2021). Available at SSRN: https://ssrn.com/abstract=3950094 or http://dx.doi.org/10.2139/ssrn.3950094

Gregor Dorfleitner (Contact Author)

University of Regensburg - Department of Finance ( email )

Regensburg, 93040
Germany

Lars Hornuf

University of Bremen - Faculty of Business Studies and Economics ( email )

Bremen, D-28359
Germany
+49 89 20348619 (Phone)

HOME PAGE: http://www.hornuf.com

Max Planck Institute for Innovation and Competition ( email )

Marstallplatz 1
Munich, Bayern 80539
Germany

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

Julia Kreppmeier

University of Regensburg - Department of Finance ( email )

93040 Regensburg
D-93040 Regensburg
Germany

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
110
Abstract Views
314
rank
317,579
PlumX Metrics