A group of leading financial services executives, public officials, and other relevant stakeholders joined together with the World Economic Forum to outline five guidelines for appropriate data use in the industry.
The principles of data usage aim to clarify and standardize best practices that should be used by financial firms.
“This is best achieved by combining public regulation with private standards that represent the collective view of best practice and then buttressing them with a series of hard incentives that foster adoption and adherence,” said Mark Carney, governor of the Bank of England, in the report.
While companies continue to compile and analyze data for a wide range of business uses, Matthew Blake of the World Economic Forum cautions that this must be done in a responsible way.
“An uncoordinated proliferation of global data frameworks may prove counterproductive in the long run, resulting in further regulatory fragmentation with adverse knock-on effects for innovation and new business formation,” said Blake. “This is why the stakeholders convened by the forum identified a need for global principles.”
Others contributing to the report include executives from HSBC and Allianz and experts from the International Monetary Fund and the University of Oxford.
The reports five key principles, as defined by the WEF and its contributing participants, are:
Control: “Companies should be clear about their use of customer data, attain customer agreement to their customer data policies and, where appropriate, seek consent for specific uses.”
Security: “Companies should be held responsible and accountable for data security.”
Personalization: “Companies should be able to create individual customer-level profiles that allow them to provide differentiated customer services.”
Advanced Analytics: “Companies should be able to comprehensively test, validate and explain their use of data analytics and models to customers.”
Portability: “Companies should, where appropriate, allow customers to access, download, transfer and/or permit third parties to manage data about them.”
(Photo: World Economic Forum – Credit U.S. Embassy Bern – Eric Bridiers)