Data protection rules

The development of DFS was enabled as data collection, processing and storage got cheaper and interconnectivity grew exponentially. Big Data and Artificial Intelligence are the core of current data handling. Since the turn of the century, the market has constantly generated new business models (such as marketplace lending) and delivery methods (such as the embedding of banking products in e-commerce or social media platforms) of financial services with available consumer data. This innovation process is welcome as long as it increases consumer welfare while maintaining privacy and competition. As a product input, a measure of quality or a barrier to entry, data are the central element in digital markets¹.

Services like e-money or instant payments, already a reality, are highly dependent on data processing or transfer. Jurisdictions understood how the unhinged usage of financial consumer data could be harmful and began building a legal and regulatory framework that would rein in providers’ greed for user information: examples are the EU General Data Protection Regulation (GDPR), the Brazilian General Law on Data Protection (LGPD) and the Canadian Personal Information Protection and Electronic Documents Act (PIPEDA). The implementation of national frameworks, while leaving sufficient legroom for financial innovation, must ensure consumer privacy and adequate data usage by providers.