Consumers should have more control over data collected by banks, says BIS

Central bank collective the Bank for International Settlements (BIS) has called for a new governance system that gives consumers and companies more control over data shared with banks and social media platforms.

The organisation said that over the past two decades, tech developments have led to an “explosion” in the availability of data.

In a new report, the BIS warned that consumers often are unaware of the benefits of the data that it has collected on them and “find it difficult to assert their rights” regarding the collection, processing and sharing of their data.

It said that this is a particular problem for consumer lending, where younger people and poorer communities have less credit and therefore are often denied loans. The report suggests that with better access to their own online data, individuals could have a different way to prove eligibility.

“…these low-margin, high-risk consumers are uneconomical to reach in the traditional system without access to digital data sharing,” said the report.

The BIS proposes a data governance system that restores control to the parties generating the data, by requiring consent prior to their use by service providers.

It said that the new system should be open, with consent that is “revocable, granular, auditable, and with notice in a secure environment.” It also suggested that the rules should include purpose and use limitation, data minimisation, and retention restriction.

“When data are shared between data providers and data users, the data governance system should specify which data are requested for sharing, how long they will be retained by data users, and who will process them," said the report.

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