In recent weeks, consumer concerns regarding the security and sale to third parties of financial transaction data have made headlines in the United Kingdom. Authorities now are warning banks they are prepared to write legislation on the issue unless companies voluntarily return data to customers who request it.
According to the midata project, a public-private sector partnership to increase data processing transparency, British consumers should have more access and control over the data that is processed in a financial transaction. While many of the bigger financial companies like Lloyds, MasterCard and Visa have all agreed to support the project, others have not been as eager to comply. The Department for Business, Innovation, and Skills, however, has announced it is prepared to force the handover of data in three fields: checking and credit card accounts, mobile and energy.
From a Finextra article:
“‘midata’ is all about putting power into the hands of consumers. Many businesses reap huge commercial benefits from the information they gather from consumers’ daily spending patterns. Why shouldn’t consumers also benefit from this by having access to their own data to enable them to make better choices?” says Jo Swinson, employment and consumer affairs minister. The project further aims to facilitate simpler comparisons of products, allowing consumers to find the most effective plans for them.
As the processing of financial transaction data has become more public, both companies and authorities must come to a consensus on the level of consumer participation in data collection. The UK case shows that authorities have stressed that consumers can play a very active role, likely decreasing the attractiveness of purchasing the data and making it more costly for firms to collect and process. While the UK and Europe as a whole have been known to take action involving extensive government intervention, other markets like the United States, known for less public sector regulation on data privacy will probably see increased involvement by authorities in the wake of consumer concerns.
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