Bankers are worried that they will have to be granted permission from customers to gather data for banking purposes, which they currently use to structure loan losses and detect fraud. When the new law goes into effect, however, bankers will no longer be able to use the data for specific purposes, said the Financial Times.
Another potential issue for banks is ensuring that they have the right processes in place to delete requested customer data when needed. While data is stored across many platforms, banks may have to do some extra work to ensure that the data is erased.
Consumer rights groups in the EU believe otherwise. According to the article, the updated law will pave the way for more transparency in the financial sector and will force banks to behave more responsibly with data.
The European Commission said that banks would still be able to collect and use the data to fulfill legal obligations such as fighting money laundering. The new law is expected to “ greatly simplify the regulatory environment for banks in the union since one single data protection law will apply across Europe,” the commission said.
In August, Compliance Week reported that the EU Justice Commissioner Martine Reicherts said that modernized data protection rules would help businesses in several ways. It will replace a hodgepodge of regulatory frameworks with one clear set of rules, and allow companies to deal with a single supervisory authority rather than 28. The reform “will create a level playing field for Europe’s digital industry,” Reicherts said.
The European parliament and national governments hope to reach a decision by the end of this year.