Principles for the appropriate use of customer data in financial services
27 Jun 2019
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.
Although 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, a group of senior stakeholders working with the World Economic Forum 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.
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 banks, insurance firms, technology companies, consumer groups, trade unions, central bankers, regulators, law firms and religious groups 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. A Forum White Paper 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.
These principles have been developed in partnership with and are endorsed by the following institutions:
Board Member and Chief Operating Officer