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Technology
20 December 2024

Navigated Data Privacy Challenges Amid New Laws

How Businesses and Borrowers Adapt to Rising Regulatory Demands and Innovations

Across the rapidly changing landscapes of technology and financial services, data privacy and security have become central to discussions among users, regulators, and innovators. With new legislation taking effect next year and advances like cryptocurrency appealing to privacy-focused consumers, organizations must adapt quickly to maintain compliance and trust.

Leading up to January 1, 2025, five states will implement comprehensive privacy laws: Delaware, Iowa, Nebraska, New Hampshire, and New Jersey. Each law carries distinct requirements for businesses processing personal data, aiming to protect consumers amid the rampant digital transformation.

Delaware's Data Privacy and Data Protection Act (DPDPA) mandates organizations to comply if they process data from at least 35,000 consumers or earn significant revenue from selling personal data, including nonprofits. Iowa’s Consumer Data Protection Act (ICDPA) is slightly more business-friendly, impacting those with at least 100,000 consumers, and allows for 90 days to cure violations.

Meanwhile, Nebraska's Data Privacy Act (NDPA) imposes broad application criteria, requiring opt-in consent from consumers for selling sensitive information, and it features a 30-day cure period for violations. New Hampshire's law emphasizes consumer rights, demanding businesses to implement strong data security measures and provide clear privacy notices. New Jersey's law, effective January 15, introduces stringent data protection assessments alongside universal opt-out mechanisms.

Businesses now need proactive strategies to navigate the changes. They must assess which laws apply individually, conduct thorough data audits, update privacy policies, and implement security measures to protect consumer information. Regular training for employees about the new regulations is also necessary to maintain compliance.

At the same time, cryptocurrency is seeing growth among those seeking privacy solutions. The Deep State ($DST), launched on December 20, 2024, emphasizes its tagline, "Untraceable. Undeniable. Unstoppable." Tailored for those increasingly wary of traditional banking systems, $DST offers features like untraceable transactions and community involvement, targeting users desiring both financial privacy and decentralized engagement.

Yet not all sectors are thriving smoothly. Digital lending apps are under scrutiny for invasive practices, particularly in Kenya, where harvesting data from borrower smartphones has become commonplace for determining creditworthiness. Although these apps can provide much-needed financial access to those often overlooked by traditional institutions, they come with serious questions about privacy violations

A viral discussion led by influencer Cyprian Is Nyakundi highlighted the disturbing tactics used by some lending companies. One borrower was scorned with the message, "Hello, kindly inform XX to pay the Okash loan of Sh2560 TODAY before we proceed and take legal action to retrieve the debt." Such hard-hitting communication often bears dire consequences for borrowers, leading to fear and distress.

Reports indicate these lending platforms exploit Kenya's legal environment to carry out practices many see as predatory. While the country implemented its Data Protection Act to secure consumer data and restrict coercive collection methods, the enforcement has been limited. Regulatory bodies, like the Office of the Data Protection Commissioner, have received numerous complaints but lack the resources to address the volume effectively.

Despite the alarming practices of these apps, discussions are being sparked about borrowers' rights and the obligation of lenders. Kenyan law outlines protections such as the right to access personal data, the right to opt-out and demand deletion, yet many borrowers remain uninformed of their entitlements.

Global perspectives show these issues are not unique to Kenya. Similar lending practices have emerged elsewhere, prompting advocates to call for more comprehensive regulatory frameworks. Countries like the Philippines have successfully curbed such excesses with rigorous penalties for non-compliance, providing valuable lessons for regions still grappling with the digital lending dilemma.

The need is clear: as technological innovation continues, businesses must juggle the responsibility of providing services with protecting consumer data privacy. Whether through regulatory compliance or opting for privacy-centric financial solutions, stakeholders must work cohesively to strike the delicate balance between digital advancement and consumer rights.

With stakeholders now poised for 2025, the interplay between financial services, legislative requirements, and technological advancements will only intensify, leaving individuals to adapt and navigate this increasingly complex environment.

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