Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/248904 
Year of Publication: 
2021
Series/Report no.: 
CESifo Working Paper No. 9359
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
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.
Subjects: 
data privacy
FinTech
General Data Protection Regulation
privacy statement
textual analysis
financial technology
JEL: 
K20
L81
Document Type: 
Working Paper
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