CCR2 GDPR
A time of individual empowerment
This year’s wealth of regulatory change will focus on giving consumers the rights to decide on their own future
Aileen Lees Senior policy adviser, Association of Mortgage Intermediaries
As we have entered the New Year, the regulatory and legislative changes that we had seen from a distance are now starting to come into affect.
Open banking Open banking launched at the start of the year, although five of the nine banks were not able to meet the deadline, so deferred implementation until February. Customers can now request that their bank
give third-party providers access to their data, with customers not being responsible if an unauthorised payment is made. PSD2 came into effect at the same time,
so that these third-party providers, giving customers access to a single dashboard for their accounts or personalised comparison services, will have to be authorised by the Financial Conduct Authority (FCA). Whether lenders will move to require
customers to provide them with more data as a result, remains to be seen, as they will be making judgements based on new sets of data with no history cycle to apply criteria. A key factor will be that, once they acquire
this information, they cannot ‘unknow’ some of it. This could mean that some cases, which may have flown through, are now be rejected due to gambling or other cashflow data. If lenders go further in the data they access,
they will soon have to justify why they need to hold it under the General Data Protection Regulation effective 25 May.
Regulatory aims If firms consider what this regulation is trying to achieve, then it will not only be easier to comply with, but also end up in a positive position from a regulatory perspective.
32 Regulation is designed to address this by
empowering people and giving them more rights. Consumers will control their data. If firms aim to effectively communicate
how data is held and what it will be used for, instead of relying on complex terms and conditions, or trying to find alternative ways to avoid complying with certain requirements, then these firms are unlikely to be a focus for either the FCA or the Information Commissioner’s Office.
In the current world, we have technology firms holding full profiles of individuals and using their data for purposes that are not particularly transparent, nor do they allow opting out of additional processing. Regulation is designed to address this by empowering people and giving them more rights
In the current world, we have technology
firms holding full profiles of individuals and using their data for purposes that are not particularly transparent, nor do they allow opting out of additional processing.
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Mortgage market study Later this year, we expect developments in the FCA’s mortgage market study, with the interim report due in Spring and the final report due the fourth quarter, which will outline any remedies. The study has focused on if competition
can be improved to benefit consumers; in particular if the available tools (including advice) help them make effective decisions, and whether commercial arrangements lead to consumer detriment. With recommendations not due until the
fourth quarter, we can at least expect any changes not to be effective until 2019-2020.
Conclusion With a focus on individual empowerment, access, and protection, 2018 really is the year of the consumer. This perspective may help firms in their
preparations, but they should also be ready to embrace technology if they are to survive the disruptors that these changes allow to enter this market. CCR2
Edited from an article originally written for Mortgage Introducer
March 2018
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