ESAs Publish Report Analyzing Impact of Big Data in Financial Sector
The Joint Committee of ESAs published the final report analyzing the impact of Big Data on consumers and financial firms. ESAs found that the benefits of Big Data outweigh the potential risks that Big Data pose to financial services consumers. ESAs also published a factsheet on Big Data to inform consumers of financial services about the impact of Big Data. The factsheet provides consumers with the information about the potential benefits and risks of the use of Big Data techniques; it also aims to raise awareness of the measures consumers can take if they experience issues in the use of Big Data.
The report concludes that Big Data brings many benefits for the financial industry and consumers of financial services. These benefits include more tailored products and services, improved fraud analytics, or enhanced efficiency of organizational internal procedures. However, financial services consumers should also be made particularly aware of some of the risks posed by Big Data. The risks identified by ESAs include the potential for errors in Big Data tools, which may lead to incorrect decisions being taken by financial service providers. Additionally, the increasing level of segmentation of customers, enabled by Big Data, may potentially influence the access and availability of certain financial services or products. Nevertheless, ESAs concluded that any legislative intervention at this point would be premature, considering that the existing legislation should mitigate many of the risks identified. This report results from a consultation that was conducted between December 2016 and March 2017. ESAs will continue to monitor developments in this area in the coming years and invite financial firms to develop and implement good practices on the use of Big Data.
Related Links
Keywords: Europe, EU, Banking, Insurance, Securities, Big Data, Fintech, ESAs
Previous Article
ESRB Analyzes Impact of Diversification in Sovereign Bond PortfoliosRelated Articles
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.
BIS Bulletin Examines Cognitive Limits of Large Language Models
The use cases of generative AI in the banking sector are evolving fast, with many institutions adopting the technology to enhance customer service and operational efficiency.
ECB is Conducting First Cyber Risk Stress Test for Banks
As part of the increasing regulatory focus on operational resilience, cyber risk stress testing is also becoming a crucial aspect of ensuring bank resilience in the face of cyber threats.
EBA Continues Momentum Toward Strengthening Prudential Rules for Banks
A few years down the road from the last global financial crisis, regulators are still issuing rules and monitoring banks to ensure that they comply with the regulations.
EU and UK Agencies Issue Updates on Final Basel III Rules
The European Commission (EC) recently issued an update informing that the European Council and the Parliament have endorsed the Banking Package implementing the final elements of Basel III standards