Data Mobility and the Financial Sector: How to Regulate?
Data and data mobility are having a growing impact on financial services. Moreover, new EU regulation has been proposed or is expected that aims to create an EU data market by 2030 by enhancing the ability of data holders to share their data. In light of these developments, the way in which relevant data is shared with and accessed by financial entities requires attention of financial authorities such as De Nederlandsche Bank (DNB) and the Netherlands Financial Markets Authority (AFM). Therefore, AFM and DNB lay down a preliminary policy vision for data mobility in relation to the financial sector: a broader ability to share data can provide benefits, but should be combined with enhanced focus on the privacy and interests of data holders, including a greater responsibility on data users to consider data holders’ interests. Stakeholders are invited to respond to this preliminary policy vision.
Data and access to data is becoming increasingly important in the financial sector. This is true of financial data, but also increasingly for non-financial data collected by BigTechs platforms or data generated by connected products such as cars and wearables. Broader availability of this data could contribute to financial innovation. Unequal access to relevant data can also adversely affect competition and concentration in the financial sector; and ultimately financial stability. Giving the data holder greater ability to share relevant data with financial institutions can reduce data concentration and can thus contribute to a more innovative, competitive financial sector.
Greater focus on interests of data holders
Data sharing can create benefits for financial consumers (i.e. data holders), but also poses risks: data sharing can expose data holders to a loss of privacy and consumers can be adversely affected by insights derived from their data. Moreover, sharing of data by one data holder can also affect others that have not shared their data. Therefore, in addition to requiring that a data holder grant permission for the sharing of their data, data users should also be given a responsibility to use data that is shared with them in an ethical manner.
Linking (sectoral) data-sharing initiatives
To enhance the potential of data mobility, AFM and DNB find it important that different data types can be shared in a seamless matter. Moreover, it is key for AFM and DNB that the same protections and rules apply to the sharing of different types of data. In the short-run, this requires that the design and implementation of sectoral data-sharing legislation – including an Open Finance initiative that would enable data holders to share a broader set of financial data – be coordinated and reciprocal. Over the longer term, a cross-sectoral (horizontal) approach to data-sharing regulation may be set up, that can streamline protections for data holders, and rules around, for instance, compensation or liability.
Invitation to Respond to the Discussion Paper
The Discussion Paper contains a set of discussion questions. We invite any stakeholder to provide their views in respect of these questions, by filling out the interactive pdf in either English or Dutch and returning it to consultatie@dnb.nl by close of business 11 November 2022.
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