The joint committee of the European Supervisory Authorities (ESA) has launched a public consultation on the benefits and risks of big data.
The move is an attempt to determine whether any further regulatory or supervisory actions may be needed towards the development of the big data ‘phenomenon’.
Big data is a theme linked to the ever increasing availability of data and advances in IT tools, applications, platforms and systems to collect, process and analyse it.
Global Custodian recently investigated the increasing data challenges that industry participants are facing.
Increased regulatory requirements across multiple jurisdictions, a need for better quality information and more sources of investment have all added to a growing pressure for the buy-side and custodians alike to up their data services.
The ESA discussion paper has outlined the potential benefits of big data including better analytics mean firms can profile customers in order to personalise products and services, enhance their own internal processes and improve their fraud detection capabilities.
In addition the paper also notes potential risks associated with big data including access issues for consumers being classified as undesirable due to firms’ abilities to undertake more granular analyses.
“Internet and mobile devices have become a core part of our lifestyle and the ways in which data is generated, collected, stored, processed and used have evolved at unprecedented rates,” said Gabriel Bernardino, chairman of the European Insurance and Occupational Pensions Authority (EIOPA) and the current chair of the joint committee.
“Entire business sectors are being reshaped by building on data analytics and Big Data has the capability to transform the way products and services are provided with potential benefits and risks for consumers and financial institutions.”
As part of the consultation, ESA will monitor emerging risks for consumers and financial institutions as well as existing legislation on data protection, competition and consumer protection.
The consultation will close in March 2017.