New EU regulation renews banks data laws and protects EU citizen’s data privacy

Making an online payment
Banks are giving customers control over their personal data, and its impact is huge. In the coming months, banking will look very different to how it does today. Not only will new open banking rules allow for improved sharing of customer data across an array of institutions, but the range of businesses and consumers it will serve are projected to be much broader. At the heart of this move is the recognition that customers will have more control over their data than ever before.

Kick-starting this shift is new EU regulation. The second Payments Services Directive (PSD2), which went live in January, allows for the permissioned sharing of customers transaction data with trusted third parties, enabling competition and the delivery of new and innovative services. In the UK, this is further reinforced by the Competition Markets Authority (CMA) Open Banking Initiative, which also went live in January. Finally, coming into effect in May, the General Data Protection Regulation (GDPR) brings data laws up to date, protecting EU citizens’ right to control how their data circulates.

The 1.7 million adults in the UK alone without any relationship to a bank could be offered a very different pathway into a positive relationship with the world of financial services. By shifting the focus back to the customer, tools such as EY’s Digital Passport will allow these potential customers, as well as the wider public and businesses, more control over how their data is shared and for what purpose.

From the customer’s point of view, it gives them control and transparency over who has access to their data, allowing them to share their information easily and confidently across many institutions – everything from banks to utility providers and tax authorities. This can drastically reduce the time it takes to create new relationships and get onboard with new services. Digital Passport can also provide banks and other institutions with much more unified data about their customers.

The open banking regime inaugurates a new data-first in financial services, and tools like Digital Passport will allow banks to harness it. Upcoming regulations will require a much firmer grasp on where and when financial and personal data circulates between consumers, financial institutions, and other service providers. All of this means consumers are acquiring greater control over their financial data. The only question is what they will do with it?

Read the full article here.

EY legal contacts:
Fabrice Naftalski

 

Fabrice Naftalski – Data Privacy Law Leader

 

 

Philippe Zimmermann
Philippe Zimmermann – Banking and Capital Markets Sector Leader Law