ECRI Newsletter Nº 56, Spring 2018

Privacy rights, cybersecurity and over-indebtedness in the menu

25th May 2018 is the deadline for the implementation of the General Data Protection Regulation (GDPR) and the e-Privacy Regulation, two key pieces of legislation that have the potential to significantly change practices in the retail banking sector regarding privacy rights. Proper and efficient use of personal data remain at the core of the delivery of well-designed financial services to consumers. As such, GDPR and e-Privacy can markedly affect the different stages of products such as consumer loans or mortgage loans: marketing, advice, scoring, recovery, etc.

This is the background for “Big Data, innovation and regulation in finance: finding the right balance!”, the Fintech annual conference ECRI is organising in partnership with ECMI. Held on 7 June in Brussels, the event will try to assess how and to what extent both financial innovation and consumer rights can be promoted. It will also address the different issues involved in enabling the development of balanced processes for robo-advisers. Last but not least, this conference will look closely at cybersecurity in finance and the most adequate policy mix to address the growing problem of cyber-attacks. To tackle that subject, we are pleased to welcome the Executive Director of ENISA, Udo Helmbrecht.

Cybersecurity in finance is a particular focus for ECRI and it has brought a group of experts from the financial industry together in a Task Force on cybersecurity in finance since September 2017. The original purpose was to debate the multi-sectoral cybersecurity package adopted by the European Commission in September 2017, and to build specific policy recommendations that can contribute to strengthen the cyber resilience and response of EU financial firms. Key findings of this initiative will be presented at the Conference on 7 June, but Task Force Chairman Mr Richard Parlour already outlines some elements in this Newsletter. Additional reflections are provided by Rasmus Theede, an expert with an experience of twenty years working with international security management.

Still on the digital agenda of banks, ECRI recently published a study commissioned by ACI Worldwide, “Costs and values in banks: a model fit for the digital area?”. An event was organised on 12 April to discuss the multi-dimensional aspects of the digital transformation of both retail and corporate banks, and what positions policymakers should take on these issues. The main findings and the related executive summary of the study are republished in this Newsletter. Further initiatives by CEPS and ECRI are expected during the coming year on the best policy approaches to stimulate a balanced digitalisation of banks.

In the second half of the year, ECRI will be organising specific initiatives to contribute to the increasing debate about how financial education can contribute to decrease households’ over-indebtedness. Other policy tools aimed at addressing the issue of over-indebtedness will also be discussed. To gain a better understanding of what is at stake, ECRI will place specific focus on the latest progress in the research that analyses the drivers behind the dynamics of over-indebtedness.