Principles for the appropriate use of customer data in financial services
Shibuya Crossing Intersection, Japan Image: Ryoji Iwata
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The impact.
There is general agreement among industry executives and public-sector leaders from central banks and regulators that data – if used responsibly – will yield substantial improvements to the way financial services are delivered and consumed. The World Economic Forum, in collaboration with a group of senior stakeholders, has ranked the inappropriate use of customer data as one of the top two risks facing the global financial system.
The International Monetary Fund (IMF) and the World Bank Group (WBG) echoed this sentiment in their Bali Fintech Agenda The agenda calls for the development of robust financial and data infrastructure that protects the integrity of data and financial services.
"For the financial sector to be effective in this new economy, it needs to continue to be resilient, fair and dynamic, while acknowledging the responsibilities that come with employing this new data."
”What's the challenge?
In the past decade, the financial services industry has undergone immense transformation. Technologies such as artificial intelligence (AI), cloud computing and robotics have profoundly changed the way banks, insurance companies and, increasingly, technology players deliver financial products to customers. Data is at the core of all these technologies.
Our approach.
Given the centrality of data to the evolution of the financial system and the potential implications for trust and, eventually, financial stability of inappropriate data use, the Forum has been working with Allianz, CIMB Group, Dun and bradstreet, Kabbage, Infosys, UBS and other banks, insurance firms, technology companies, consumer groups, trade unions, central bankers, regulators, law firms and civil society to develop global principles guiding the use, collection and sharing of data. These principles can be explored here.
The consequences of inaction on the appropriate use of customer data – such as overexposure to risk, the stifling of innovation or competitive inequity leading to poor industry structure – demand the expedited, yet careful, implementation of these principles globally.
The Appropriate Use of Customer Data in Financial Services report published in September 2018 provides detailed context on this initiative and offers a roadmap for how private and public stakeholders may align with the principles.
How can you get involved?
This initiative is part of the Platform for Shaping the Future of Financial and Monetary Systems.
If you are interested in working with us to build a more efficient, resilient and equitable international financial system, contact us.
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