By Andrew Joss, head of industry consulting EMEA, Informatica
The EU General Data Protection Regulation (GDPR) has highlighted several areas of new privacy regulation that will prove particularly challenging for many financial services institutions. In broad terms, the regulation aims to enable citizens to take back control of their own data and to unify privacy regulations across the EU. This will drive significant changes in data collection and processing across the sector.
Britain’s impending exit from the European Union raises some questions about the exact legislature which will come into effect in the UK. But we can be sure of one thing – any financial organisation doing business in Europe will need to be GDPR compliant.
That’s because the GDPR has extended the scope of privacy to cover not only data held when an organisation or person is inside the EU, but also organisations outside the EU that process EU citizen data. The definition of personal data now covers a raft of areas including the usual personal details, as well as a wider range of items like photographs and social media content. Additional challenges around a right for a citizen to be forgotten and the ability for citizens to demand access to their data, will cause all financial services institutions to look very carefully at their policies around the data they hold on their customers.
New requirements have been introduced – for example, explicit consent will now need to be obtained for the collection and use of data, and there are some severe fines and sanctions in cases of data breaches. As a result of these proposed changes, the role of the data privacy officer has now also become a great deal more significant because of these potential non-compliance fines or sanctions.
To help businesses prepare to meet the new demands of GDPR, below we explain four of the key issues that they will face and how to address data governance as a result.
- Locating privacy data
The key challenge of GDPR for any institution is the need to find all privacy-relevant data across the enterprise. Customer data sits in many different systems, in many different forms. The rise of omni-channel in financial services means that customers can engage through any channel and through any appropriate medium. When they do so, a digital footprint is usually stored somewhere to record that fact for proof of activity, or to support remediation when errors occur. All of these footprints, for all types of engagement, have the potential to be in the scope of GDPR.
- Understanding how to treat data once identified
The new ‘opt in’ clause for the GDPR regulation means that a customer is giving consent for their data to be stored and used. However, financial services institutions need to be aware that this consent may apply to certain parts of a customer’s data and not to others. The increased complexity of data tracking caused by this right to consent means institutions will need to consider how to best address the use of non-consented data whilst still maintaining transactional and financial integrity across the business.
- Customer requests
Customers will now also have the right to request that a financial services institution provides them with all details pertaining to the information held about them. Under GDPR this will include information going outside the institution, requiring additional security considerations whilst being a costly exercise if carried out manually. This is even more the case if an institution misses something that the customer knows about when providing this information. In that case, the organisation reveals that they don’t have their customers’ data under control and opens itself up to sanctions.
- Enacting the right to be forgotten
The GDPR ‘right to be forgotten’ clause will require an institution to remove all relevant customer data from all its systems upon request. Removing data held in multiple different systems and in multiple different formats is either a very time consuming and expensive manual exercise (with the risk of accidentally failing to remove all the data) or requires institutions to look at process automation to achieve it in an industrialised manner. Either approach will require institutions to look carefully at the time, cost and risks associated with each option and build solutions to address them.
GDPR has shown that getting customer data under control is now a major business imperative for financial services organisations. The consequences of non-compliance are potentially substantial. Yet, software solutions already exist that can help address a number of the key GDPR data challenges. The two years before GDPR comes into effect may seem like a long time, but financial services organisations need to be ready – the implications of being caught off guard could be very significant.