Data privacy and data protection are very important for businesses across various sectors, including financial services and mortgage brokerages in particular, where a lot of sensitive information is handled.
Non-compliance with the regulatory standards can result in penalties, harm to the firm’s reputation or loss of business when clients lose confidence in the company, it is important that client data safety is handled as top priority. Mortgage brokers can satisfy the official General Data Protection Regulation (GDPR) requirements and increase client trust and safety at the same time by using certain tools and establishing procedures.
This article is about how a mortgage CRM (Customer Relationship Management) system can help brokers follow the GDPR rules and manage the compliance requirements.
Interpreting GDPR Standards
GDPR came into force in May ‘18 to “streamline and enforce data protection measures and privacy rights for individuals within both the European Union (EU) and European Economic Area (EEA)”. It has strict rules for obtaining, processing, and maintaining client data, which is important for mortgage broker firms as well.
As per the GDPR regulations, mortgage brokers have to get their clients’ consent before gathering and keeping their details on file to maintain the security and confidentiality of their sensitive information and to make sure that the clients are aware of what is happening to their data.
The curveball was that mortgage brokers had to go back to their old clients and get their written consent retrospectively, so it wasn’t just for new clients going forward.
The Fundamental Principles of Complying With GDPR
- Lawfulness, fairness, and transparency ─ Mortgage brokers have to handle data in a fair and transparent way, which includes informing their clients about how their data will be used and get their upfront consent for processing.
- Purpose limitation ─ Mortgage brokers should only collect necessary data and for legitimate reasons and not process it in ways that are inconsistent with those purposes, e.g. passing it on for market research purposes.
- Data minimization ─ Mortgage brokers have to make sure that the personal data they hold is sufficient, relevant, and restricted to what’s necessary for the purposes of processing them. As mortgage cases rely on ‘soft’ facts, e.g. social circumstances, plans, and aspirations as much as on ‘hard’ facts such as income and credit history, sometimes it can be difficult to tell what information is strictly necessary for handling a mortgage case.
- Accuracy ─ Mortgage brokers are accountable for maintaining the accuracy of data by correcting or removing any outdated information.
- Storage limitation ─ Mortgage brokers are advised to retain data for as long as needed for the purposes it was gathered. In lieu of black and white rules as well as potential future audit requests or complaints, brokers are still in the dark regarding how long they should keep records.
Enhancing GDPR Compliance with a Customer Relationship Management (CRM) System
A mortgage broker CRM acts as a centralized platform for managing client interactions, communications and transactions.
When set up and used effectively, a CRM system can work alongside GDPR regulations by offering the necessary tools and features to ensure adherence to the rules. Let’s explore how a CRM tailored for mortgage brokers can assist in complying with GDPR.
Consent Management
A mortgage broker CRM allows brokers to collect and handle client consent efficiently. By using consent forms and e-signatures, brokers can secure permission from clients to gather and processing their personal information.
The CRM system logs consent preferences, such as the reasons for data processing and the preferred communication channels for clients ensuring alignment with GDPR guidelines.
Data Encryption and Security
Data security plays a role in meeting GDPR standards. A specialized mortgage CRM software has built-in encryption and security measures to safeguard client data against access, breaches, and cybersecurity risks. Through encryption methods, secure data storage practices and access to sensitive information is protected, offering reassurance to both brokers and their clients.
Data Subject Rights Management
GDPR gives individuals certain rights concerning their data, including accessing, correcting, deleting, or limiting the processing of their information. CRM software simplifies the management of data subjects’ rights by offering tools to handle client requests and inquiries, so brokers have the ability to access, update and remove client information using the mortgage CRM system as needed to comply with GDPR regulations.
Maintaining Detailed Records and Ensuring Compliance
A mortgage broker CRM system keeps records of client interactions and data processing actions. These records then serve as evidence of adhering to GDPR rules by documenting consent, data access, changes and deletions.
The mortgage CRM’s reporting tools also produce compliance reports and can help brokers understand whether their data protection strategies work and which areas need improvement.
Implementing Automated Data Retention Policies
According to GDPR guidelines, “personal data should only be stored for as long as necessary for its intended purpose”. In practice, when a mortgage broker CRM system is in place, brokers can have an automated data retention rule in place to specify retention periods and automatically archive or delete information after a set time.
This would then reduce the risk of violating GDPR storage restrictions.
Promoting Education and Awareness
Educating staff members on GDPR compliance is crucial. Employers should provide training materials and resources to educate employees on data protection policies, GDPR laws, and effective methods for managing client information. These can include interactive training modules, quizzes, and tutorials to help increase staff awareness and manage data privacy within the broker firm.
Ensuring GDPR compliance is mandatory for mortgage broker firms in the UK. By using a mortgage CRM system, brokers can improve their data protection methods, adhere to GDPR rules, and maintain trust with clients.
Various system features (e.g. templated consent management form, data encryption, audit trail records, and compliance reporting) can be included in a mortgage broker CRM system to manage GDPR requirements efficiently.
In short, by adopting a CRM solution and following appropriate data protection practices, mortgage brokers can show their dedication to protecting client information and complying with GDPR guidelines, which is important to stay safe.