Financial watchdogs in Europe are planning to tighten the rules surrounding the use of big data. The European Securities and Markets Authority, the European Insurance and Occupational Pensions Authority and the European Banking Authority are working together in an effort to determine if new regulatory controls on big data usage are required.
How financial institutions handle personal data will be high on the agenda, as these details are used to compile profiles of customers and identify behavioural patterns and trends so they can be targeted in a more relevant way.
Working under the banner of the Joint Committee of the European Supervisory Authorities, the organisations hope to resolve questions about “firms’ expected behaviours in order to comply with their overarching obligations”.
Another priority will be assessing the move towards greater automation when it comes to using big data. The committee wants to assess the “phenomenon of human interaction between consumers and financial institutions being increasingly replaced by algorithms that provide advice or other forms of recommendations”.
“The work analyses the benefits and risks and assesses, which, if any, regulatory and/or supervisory measures need to be taken,” it stated. Any conclusions drawn from this analysis will be used to devise policy recommendations for next year, if it deems it appropriate to do so.