The Influence of Readability of Financial App Privacy Policy on Enterprise Performance

The Influence of Readability of Financial App Privacy Policy on Enterprise Performance

Huosong Xia (Wuhan Textile University, China), Changlong Xu (Wuhan Textile University, China), Justin Z. Zhang (University of North Florida, USA), Sajjad M. Jasimuddin (Kedge Business School, France), and Xinyu Li (Wuhan Textile University, China)
Copyright: © 2024 |Pages: 16
DOI: 10.4018/JDM.361999
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Abstract

From the perspective of the inhibition of privacy computing theory, taking user satisfaction as risk perception, this paper discusses how the readability of financial APP privacy policies inhibits user satisfaction, thus affecting enterprise performance. Firstly, this paper measures the readability of privacy policies by constructing a professional vocabulary and an improved Fog Index formula. Secondly, this paper collects 615 APP privacy policies and corresponding enterprise data and empirically analyzes the impact of the readability of financial APP privacy policies on enterprise performance. This paper enriches research in the field of financial technology and empirically finds that the readability of financial technology APP privacy policies has a negative impact on enterprise performance, while user satisfaction has a positive impact on enterprise performance. In practice, this paper provides a reference for financial technology enterprises to improve the readability of APP privacy policies to improve user satisfaction and enterprise performance.
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Introduction

Because the APP privacy policy is not readable, it is difficult for users to understand. Sometimes, the user’s personal information is excessively collected without the user’s knowledge, so the user’s personal privacy is at risk of being leaked. In order to inform customers how companies collect, use, disclose, and manage their private data, different privacy policies have been implemented. As a unique attribute of financial apps, it requires higher privacy protection. On the one hand, they are the object of providing services and the main body of network information services, so they play a key role in protecting customers’ privacy. Among them, the publication and effective implementation of the App privacy policy are effective ways to protect customers’ privacy from being leaked. However, at present, there are many problems with the text content and implementation effect of various apps. Some studies have found that consumers generally distrust privacy policies, and most people think that privacy policies are basically ineffective in reflecting law enforcement, changing ideas, or influencing purchase behavior (Zhu et al.,2020).

A privacy policy is a legal contract between users and APP service providers, but some privacy policy texts are very long and unreadable, so many consumers will not read the privacy policies(Georgetown University et al.,2010) and directly agree to the terms of service. However, most privacy policies have disclaimers, personal privacy collected by the APP, and clauses that are unfavorable to users, such as the use and sharing of personal privacy and legal constraints. Users agree to privacy policies without reading them, and they need to face huge potential risks (Chakraborty et al.,2022). For example, the privacy policy unilaterally declares that enterprises have the right to change or stop their business at any time, are compulsory exempt from all responsibilities, and arbitrate for all disputes and arbitration only, etc. This implies the potential risks of personal data privacy disclosure (Zeng et al.,2022); for example, enterprises over-collect users’ personal information without customers’ knowledge through some unclear privacy policies(Liu et al.,2021), illegally use and disclose users’ personal information, and form accurate portraits based on users’ use traces and promote advertisements in a targeted manner(Liu et al.,2021). In China, The National Network Information Office reported that Didi Chuxing had over-collected users’ personal privacy due to illegal activities and took measures to protect users’ private information from further disclosure. Prior to this, many mobile apps were exposed because of the same problem. As a synergy, the platform collects user information and network security risks, and the risk of privacy leakage will increase with the increase of the way the platform collects user information (Ma et al.,2020).

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