Does the coronavirus spell the end of data protection and privacy? If banks are going to pursue such a strategy, they will score an own goal, says Florian Wicki, editor at finews.ch in an essay for finews.first.

This article is published on finews.first, a forum for authors specialized in economic and financial topics.

Not only is the coronavirus bringing our health care system and the economy to the brink of collapse, but the pandemic crisis is also putting our society to the test.

The government has said that it wants to collect and analyze the movements of citizens using their mobile phone data. After reports about the government’s plan, there have been voices that didn’t just welcome the proposal but urged going further.

Looking beyond our borders shows where it will end: the European Commission wants to sign up one big mobile phone provider per member state and get them to send their location data collection to Brussels. This will enable the EU to develop an EU-wide people’s movement data network, according to a report by the European edition of «Politico».

In Switzerland, we haven’t quite come that far, at a scenario that might have been taken straight from a George Orwell novel. It came as a shock when the canton of Argovia decided this week that the police was allowed to use video surveillance in all public spaces, without prior agreement of a data protection officer.

«The yearning for a stronger state, a state that is keeping tabs on its citizens, is a great concern»

Meanwhile, the federal government specified that only anonymous metadata would be collected and analyzed in Switzerland. It will allow the government to check whether the population adheres to protection measures, such as the prohibition of meeting in public and social distancing.

But the yearning of many citizens for a stronger state, a state that is keeping tabs on its citizens, is a great concern. After all, the Swiss – even after the demise of banking secrecy – still are known and appreciated for their discrete nature, their protection of data and privacy laws.

«Banks will still have to perform a hugely difficult balancing act»

The reputation of Switzerland has not only helped Swiss banking develop. The persistent popularity of Switzerland has also edged on the growth of the so-called «Crypto Valley», a region around the city of Zug where crypto foundations, tech startups, and blockchain firms established their businesses.

The big plus that prompted many of those firms to move to Switzerland was its privacy, a hugely important public good that is non-negotiable.

Swiss banks will however still have to perform a hugely difficult balancing act: data quite probably is, as the saying goes, the oil and gold of the 21st century. The digital transformation, a step in their development that many banks still haven’t completed, is supposed to give the client center stage. Digital banking allows the bank to read its client’s every wish from his lips. You can only do so, however, if you collect, aggregate and analyze as much information as possible about the client.

«When UBS asks for a link to your phone book, you are more suspicious than if Revolut asked»

Neobanks are one step ahead. They are versatile in the use of new technology, more modern and less regulated. And they also know how to put to work their hip, young and dynamic appearance to lull their clientele into giving up their highly private information of their own volition and without feeling bamboozled. For instance, by asking casually whether you want to link up your Facebook account or phone book with the app. If UBS asked you that question, you would still be more suspicious than if Revolut did.

Traditional banks are struggling with this phenomenon. For the moment. But they should beware in any case of the sweet temptation of dealing in the business with data. Because they would jettison something they profited from for decades if not centuries: confidentiality, discreetness and the secretiveness, a good that is in danger of being undermined in the name of customer friendliness.

The customer friendliness is what banks often use as an excuse to invade the privacy of their clients. «We need this information to provide you with a tailor-made service,» they claim. Even if, of course, the client is quite happy if he doesn’t have to sign 37 pages and wait for six weeks before a bank manages to activate an account. Surely, there’s a middle way between the two.

Florian Wicki is an editor at Swiss online publication finews.ch. Before that he was a Swiss government correspondent for Swiss tabloid «Blick», has worked in Brussels for «Politico Europe» and in Zurich for the Swiss Magazine «Republik». He studied journalism and organizational communication at Zurich University of Applied Sciences in Winterthur before graduating in 2018 from Ringier journalism school.

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