EBA published a report presenting the conclusions of its assessment on the topic of innovative uses of consumer data by financial institutions. The report concludes that no additional, industry-specific legislative or regulatory requirements are needed at present, but EBA will continue to closely monitor this innovation.
The report looks at both the risks and potential benefits of the innovative uses of data and identifies a number of requirements applying to financial institutions under the EU law, which mitigate many of the risks identified by EBA. The report encourages cooperation between supervisory authorities across all relevant policy areas and contributes to fostering a consistent supervisory approach to innovation in the financial sector. The report acknowledges that further work will be carried out in 2017, jointly with ESMA and EIOPA, on the topic of Big Data and that the three ESAs (EBA, EIOPA, and ESMA) will publish their conclusions on this particular topic within the context of the Joint Committee work.
EBA had observed that a growing number of financial institutions use consumer data in innovative ways, often combining data that they hold internally with data obtained from external data vendors, social media, or other external sources. After assessing the responses to a discussion paper it had published last year and having conducted an extensive review of a number of EU directives and regulations that apply to the use of consumer data, EBA considers that there is already an extensive set of legal requirements financial institutions must comply with, which mitigate many of the risks identified by EBA. Among these, the General Data Protection Regulation (GDPR) will provide a comprehensive legal framework on the processing of personal data applicable to all providers that process personal data of EU individuals. Financial institutions are expected to take all necessary measures to comply with the provisions of GDPR by the date of its application (May 25, 2018). EBA is mandated under Article 9 of its founding Regulation to monitor financial innovation across the EU and to foster a consistent supervisory approach to innovation in the financial sector.
Related Link: Report on Innovative Uses of Data (PDF)
Keywords: Europe, EBA, ESA, Banking, Securities, Insurance, Consumer Data, Innovative Data Use
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